What is the risk-free monthly lease rate

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Reference no: EM132042749

Question: Please give clear answer with calculations that are easy to follow :)

Suppose an H1200 supercomputer has a cost of $500,000 and will have a residual market value of $100,000 in 5 years. The risk-free interest rate is 6.1% APR with monthly compounding.

a.) What is the risk-free monthly lease rate for a 5-year lease in a perfect market?

(b.) What would be the monthly payment for a 5-year $500,000 risk-free loan to purchase the H1200)

Reference no: EM132042749

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