Jaiko has leased equipment for 5 years at an annual rent of $4000 payable at the end of each year.Jaiko could purchase the equipment for $14 420.The implicit interest rate is 12%.What is the total amount of interest to be paid by Jaiko?

Question

Quizplus · Accepted Answer

The total amount of interest is calculated by finding the present value of the lease payments and subtracting it from the purchase price. The present value of the lease payments is $8,840, and the purchase price is $14,420. The total interest paid is $14,420 - $8,840 = $5,580.

Jaiko Has Leased Equipment for 5 Years at an Annual