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Present value of the annuity for rates

Case Scenario:

Bush Corporation signed a lease for equipment from EZ Leasing Company on January 1 20X2, for a period of ten years at $40,000 per year, including insurance of $3,000 and taxes of $2,000 per year. The equipment had a useful life of fifteen years. At the end of the lease, Bush will have the option of buying the equipment outright for a dollar. Bush's incremental borrowing rate is 8%, and the rate implicit in the lease (which is known to Bush) is 6%. Lease payments are due every year on December 31. The present value of an annuity for various terms and rates are as follows:

6% 8%

10 years 7.360 6.710

15 years 9.712 8.559

On its financial statements for the year ended June 30, 20X2, Bush will display the following:

- Accumulated Equipment:
- Lease Depreciation:
- Accrued Payable:
- Interest:

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## Q : Find the periodic payments

The future value of an annuity is A=$32,000. Periodic payments are made quarterly for 4 years and annuity earns 8% compounded quarterly. Find periodic payments.