Tamarisk AG leases an automobile with a fair value of $14,130$ from Simon Motors, on the following terms.

Non$-$cancelable term of $50$ months.

Rental of $300$ per month $($at the beginning of each month$).($The present value at $0\mathrm{.}5\%$ per month is $13,309.)$

Tamarisk guarantees a residual value of $1,200($the present value at $0\mathrm{.}5\%$ per month is $546).$ Tamarisk expects the probiable residual value to be $1,200$ at the end of the lease term.

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

Tamarisk's incremental borrowing rate is $6\%$ a year $(0\mathrm{.}5\%$ a month$).$ Simon's implicit rate is unknown.

Click here to view factor tables

$($For calculation purposes, use $5$ decilmal places as allsplayied in the factor table provided$)$

$($a$)$

What is the present value of the lease payments to determine the lease liability? $($Round answer to $0$ decimal places, e $8,5,275.)$

Present value of the lease payments $$

eTextbook and Media

List of Accounts

Attempts: $0$ of $3$ used