You have just leased a property to a tenant; the lease is 8 years with beginning of month payments locked in for the first 5 years. Payments will increase for the last 3 year term. Market rates are anticipated to remain constant for the first 4 years, with a decrease for the remaining term. Based on information provided below, calculate the present value of the lease, from your perspective.

Year 1-5 lease rate$1,100 per month

Year 6-8 lease rate$1,550 per month

Mkt rate: Year 1-4$1,200 per month

Mkt rate: Year 5-8$1,300 per month

Owner's I/YR12% compounded monthly

Tenant's I/YR14% compounded monthly

Value of property(at end of lease term)

-land & bldg.$600,000