Mary, an office administrator, is evaluating the following quotation that he received for the purchase of a printer for his office:

Lease Option: Make payments of $85 at the beginning of every month for 6 years. At the end of 6 years, make the final payment of $1,250.

Purchase Option: Make a payment of $5,700 immediately.

a. What is the present value of the lease option if money is worth 6.9% compounded semi-annually?

Round to the nearest cent

b. Which option would be economically better?

Purchase OptionLease Option

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

Round to the nearest cent

d. Which option would be economically better?

Purchase OptionLease Option