Suppose a Mining Forklift has a cost of $350,000 and will have a residual market value of $140,000 in 5 years. Therisk-free interest rate is 5.7% APR with monthly compounding.

a. What is therisk-free monthly lease rate for a 5-year lease in a perfectmarket?

The present value of the lease payments is $_____. (Round to the nearestdollar.)

Therisk-free monthly lease rate for a 5-year lease in a perfect market is $_______. (Round to the nearestdollar.)

b. What would be the monthly payment for a 5-year $350,000 risk-free loan to purchase theForklift?

Note: Round the monthly interest rate to at least six decimal places.

The monthly payment for therisk-free loan is $________. (Round to the nearestdollar.)