HP 10bII+ User Manual

Time Value of Money Calculations72
Notice that even if the customer chooses not to buy the car, the lessor still includes a cash flow
coming in at the end of the lease equal to the residual value of the car. Whether the customer
buys the car or it is sold on the open market, the lessor expects to recover 7,500.
Example: Lease With Advance Payments
Your company, Quick-Kit Pole Barns, plans to lease a forklift for the warehouse. The lease is
written for a term of four years with monthly payments of 2,400. Payments are due at the
beginning of the month with the first and last payments due at the onset of the lease. You have
an option to buy the forklift for 15,000 at the end of the leasing period.
If the annual interest rate is 9%, what is the capitalized value of the lease?
Figure 15 Cash flow diagram (Calculate PV of the lease)
Table 6-12 Calculating the monthly lease payment
Keys Display Description
JG\Í
12.00 Sets payments per year.
J:Ò
10.00 Stores desired annual yield.
JDV::yÏ
-13,500.00 Stores lease price.
jV::É
7,500.00 Stores residual (buy out value).
DSÙ
36.00 Stores length of lease, in months.
Ì
253.99 Calculates the monthly lease
payment.

HP 10bII+ Specifications

General

Memory registers	22
Keyboard type	Numeric
Battery type	CR2032
Auto power off	Yes
Battery technology	Lithium
Number of batteries supported	2
Type	Financial
Form factor	Pocket
Product color	Black
Digits	- digits
Display tilting	No
Display size (HxV)	63.5 x 16 mm
Display number of lines	1 lines
Display number of characters	12

Weight and Dimensions

Weight	85 g
Dimensions (WxDxH)	80.9 x 14 x 145 mm