Question 3 HQ Ltd. purchased a used truck from Trans Auto Sales Inc. HQ paid a $3,700 down payment and signed a note that calls for 36 payments of $1,043.00 at the end of each month. The stated rate of interest in the note is 4%. As an incentive for entering into the contract, Trans has agreed to forgive the first two payments under the lease. (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round final answers to 2 decimal places, e.g. 5,275.25.) Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1.

(a)

	Your answer is correct.

What was the purchase price of the used truck excluding the incentive given?

Purchase price of the used truck

39027.21

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Attempts: 1 of 3 used

(c)

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Calculate the present value of the 34 payments of $1,043.00 that will be made by HQ for payments 3 to 36 inclusive. You will need to perform two steps. 1. Calculate the present value of the 34 payments as of the end of the second month following the purchase of the used truck.

Present value

$

2. Take the result from the first calculation and calculate the present value as of the date of purchase.

Present value

$

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Attempts: 3 of 3 used

(d)

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What amount should HQ use to record the purchase of the truck?

Total purchase price

$Enter your answer in accordance to the question statement