Use the Data in Table 3

question 85

Multiple Choice

Use the data in table 3.1 to answer the following question(s) :
Table 3.1
-Refer to Table 3.1 above. How much will you have if you deposit $1,000 today in an account paying 7% and you leave it on deposit for 5 years?

• A) $1,403
• B) $713
• C) $5,751
• D) $4,100

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Definitions:

Sales-Type Leases

Leases where the lessor recognizes immediate profit on the transaction, similar to a sale, typically in equipment or vehicle leasing.

Direct-Financing Leases

Direct-Financing Leases are lease agreements where the lessor essentially acts as a financier, purchasing an asset and leasing it to the lessee, without assuming risk of ownership.

Capital Lease

A lease classified as a financial transaction where the lessee effectively buys an asset and finances it over the lease term.

Operating Lease

An agreement that permits the utilization of an asset without owning it, usually with a shorter duration than a finance lease.