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Question: Keshia is opening a new bookkeeping service. She is considering buying or leasing some new laptop computers. The purchase price of a laptop is $1,500 and after three years it is worthless. The annual lease rate is $550 per laptop. The value of marginal product of one laptop is $700 a year. The value of marginal product of a second laptop is $625 a year. The value of marginal product of a third laptop is $575 a year. And the value of marginal product of a fourth laptop is $500 a year.

a. How many laptops will Keshia lease or buy?

b. If the interest rate is 4 percent a year, will Keshia lease or buy her laptops?

c. If the interest rate is 6 percent a year, will Keshia lease or buy her laptops?

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