The value of a 7 year lease that requires payments of $500 made at the beginning...

Question

Question

business finance

Answer 1

Answer #1

Nper = 7 * 12 = 84
PMT = 500
PV = 39800

Nominal interest rate can be calculated by using the following excel formula:
=RATE(nper,pmt,pv,fv)*12
=RATE(84,-500,39800,0,1)*12
= 1.57%

Nominal interest rate = 1.57%

Answer 2

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