TB MC Qu. 15-31 (Algo) Jagadison Co. leases computer equipment to...

Jagadison Co. leases computer equipment to customers under sales-type leases. The equipment has no residual value at the end of the lease and the leases do not contain purchase options. Jagadison desires a return of 10% interest on a six-year lease of equipment with a fair value of $814,470. The present value of an annuity due of $1 at 10% for six years is 4.791. What is the total amount of interest revenue that Jagadison will earn over the life of the lease?

Multiple Choice

• $205,530

• $170,000

• $488,682

• $135,745