13.On January 1, 2007, Simmons Company adopted a plan to accumulate funds to retire $10,000,000 of bonds payable which are due on December 31, 2016. Simmons plans to make ten annual deposits that will earn 9%. The first payment will be made on December 31, 2007. What annual payment should Simmons make?
14.Stevens Co. is considering two options for acquiring 2 new company cars. Details on the two options are:
Option 1. Lease the cars for 3 years at an annual payment of $16,000; an additional $30,000 payment would be required at the end of the lease. The interest rate on this option is 10%.
Option 2. Purchase the cars on a 3-year note at an annual payment of $20,000. The interest rate on this option is 8%.
Which option should Stevens select? Show supporting computations in good form.