Question

A leasing agreement is for 5 years. A sum of £10,000 must be paid at the beginning of the first year, to be followed by four equal payments of £x at the beginning of years two, three, four and five. At a discount rate of 8 per cent, the present value of the four equal payments is £26,496. Compute the total amount to be paid during the lease period.

Answer 1

Total amount to be paid during the lease period = £10,000 + £26,496 = £36,496