Leasing

I am puzzled as to why you are attempting questions for which you do not have an answer. You should be using a Revision Kit from one of the ACCA approved publishers, because they have answer and explanations :-) If the annual payment is X per year, then there is a payment of X at time 0, and then X for each of the years 1 to 7 (because the payments are at the start of each year). You will know from my free lectures that the PV of X at time 0 is X, and that the PV of X per year for years 1 to 7 is X x the 7 year annuity factor for 7 years at 10%. Therefore X + (X x annuity factor for 7 years at 10%) = $52,000 Therefore X x (1 + annuity factor) = 52,000 Therefore X = 52,000 / (1 + 7 year annuity factor at 10%)

Thank you sir, understood

You are welcome :-)