Johnson Company leases computer equipment to customers under sales-type leases. The equipment has no residual value at the end of the lease and the leases do not contain purchase options. Johnson desires a return of 8% interest on a five-year lease of equipment with a fair value of $970,425.

(The present value of an annuity due of $1 at 8% for five years is 4.313.) OR

(Hint: Change the calculator setting to BGN for the annuity due.)

What is the annual lease payment?

)What is the total amount of interest revenue that Johnson will earn over the life of the lease?