MGT401 VU Current GDB No. 2 Solution Spring 2012

MGT401 VU Current GDB No. 2 Spring 2012 Solution, Last Date: 21 June

Question:

ABC Enterprises has planned to purchase an asset on lease from G Corporation. The fair value of the asset is Rs.100,000 and the lease rentals will be Rs.15,636 payable half-yearly whereas Rs. 20,000 payable as down payment. The un-guaranteed residual value of the asset after the three-years lease period will be Rs.4,000. The implicit annual interest rate in the lease agreement is 9.5%. The present value of the minimum lease payment is Rs.80,000. The last payment is to be made in full along with the interest charges due.

Required:
Find out the total amount of installments and interest respectively associated with this lease agreement.
Note:
Complete working must be shown in tabular form.

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Solution:

100% correct solution:

Kindly change it into Tabular Format .
80,000
1 15,636 3,800 11,836 68,164
2 15,636 3,238 12,398 55,766
3 15,636 2,649 12,987 42,779
4 15,636 2,032 13,604 29,175
5 15,636 1,386 14,250 14,925
6 15,636 711 14,925 0
Total 93,816 13,816