Lease rate for seven-year lease in perfect market

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Suppose an H1200 supercomputer has a cost of $500,000 and will have a residual market value of $150,000 in 7 years. The risk-free interest rate is 6.3% APR with monthly compounding.

a. What is the risk-free monthly lease rate for a 7-year lease in a perfect market?

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

The risk-free monthly lease rate for a 7-year lease in a perfect market is $_____. (Round to the nearest dollar)

b. What would be the monthly payment for a 7-year $500,000 risk-free loan to purchase the H1200?

The monthly payment for the risk-free loan is $_______. (Round to the nearest dollar)

Reference no: EM131554771

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