Kelsey, an office administrator, is evaluating the following quotation that she received for the purchase of a printer for her office:

Lease Option: Make payments of $80 at the beginning of every month for 4 years. At the end of 4 years, make the final payment of $1,000.

Purchase Option: Make a payment of $4,050 immediately.

a. What is the present value of the lease option if money is worth 6.6% compounded semi-annually?

Answer:

b. Which option would be economically better?

Purchase Option or Lease Option?

c. What is the present value of the lease option if money is worth 9.6% compounded semi-annually?

Answer:

d. Which option would be economically better?

Purchase Option or Lease Option

Please submit the final answers. Thanks.