Monty Company leases an automobile with a fair value of $15,497 from John Simon Motors, Inc., on the following terms:

1.Noncancelable term of 50 months.

2.Rental of $350 per month (at end of each month). (The present value at 1% per month is $13,719.)

3.Estimated residual value after 50 months is $1,140. (The present value at 1% per month is $693.) Monty Company guarantees the residual value of $1,140.

4.Estimated economic life of the automobile is 60 months.

5.Monty Companys incremental borrowing rate is 12% a year (1% a month). Simons implicit rate is unknown.

What is the present value of the minimum lease payments?