Can someone please help me with the following question: What is the value of thi
ID: 2684617 • Letter: C
Question
Can someone please help me with the following question: What is the value of this 20 year lease? The first payment, due one year from today is $2,000 and each annual payment will increase by 4%. The discount rate used to evaluate similar leases is 9%. (Round to the nearest dollar.) *Please SHOW ME THE STEPS you took to get this answer. And please SHOW ME HOW I WOULD PUT THIS IN MY CALCULATOR (example: for payment I am guessing i would type 2000, INPUT button, P button). I am using a HP 10bII calculator. Thanks!!!!!!!!!!Explanation / Answer
4% of $2000 is = 80 so total will be = 2000+80 = $2080 now for the 20 years it will be = 2080*20 = 41600 as dicount rate is 9% so it will be finally $41600-$1744 = $39856