What is the IRR or cost of the lease

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1. An investor invests $20,000 into a fund for 4 years. The annual nominal interest rate remains at 8% in each year although it is convertible semiannually in the first year, quarterly in the second year, bi-monthly in the third year, and monthly in the fourth year. Find the accumulated value of the fund at the end of the fourth year.

2. Mountain Environmental Consulting may buy some field equipment for $40,000 or lease it for $2500 per month. In either case, the equipment will be replaced in 2 years. The salvage value of the equipment after 2 years would be S6000. What is the IRR or cost of the lease?

Reference no: EM131854698

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