Lease payments, implied interest (LO3). Ed Friendly, a car dealer, offers buyers a great deal. He will sell them a car with a list price of $22,400 for the low monthly lease payment of $399 a month...

Lease payments, implied interest (LO3). Ed Friendly, a car dealer, offers buyers a great deal. He will sell them a car with a list price of $22,400 for the low monthly lease payment of $399 a month for 60 months.

Required:

Suppose that, at the end of the five year lease, the market value of the car is $7,000. Using Excel, calculate the interest rate implied in the lease. (Hint: Use the PV function and adjust the interest rate so that the PV is the purchase price.)