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What is risk-free monthly lease rate for five-year lease

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Suppose a Mining Forklift has a cost of $150,000 and will have a residual market value of $45,000 in 5 years. The risk-free interest rate is 5.5% APR with monthly compounding.

Problem a. What is the risk-free monthly lease rate for a 5-year lease in a perfect market?

Problem b. What would be the monthly payment for a 5-year $150,000 risk-free loan to purchase the Forklift? Note: Round the monthly interest rate to at least six decimal places.

Reference no: EM132713242

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