Consider a

5-year

lease for a

$500,000

bottling machine, with a residual market value of

$150,000

at the end of

5

years. If the risk-free interest rate is

6.4%

APR with monthly compounding, compute the monthly lease payment in a perfect market for the following leases:

a. A fair market value lease.

b. A

$1.00

out lease.

c. A fixed price lease with an

$97,000

final price.