30
Procedure Key operation Display
The number of compounding periods per year is automatically set to
12. Press
s
to exit the P/Y and C/Y settings.
Enter the total number
of payments.
s
60
N
6
—~N
6000
Enter the future value.
,
17500
t
(-
175
——)~FV
-1750000
Enter the present value.
87918
87918
~PV
8791800
Enter the annual inter-
est rate.
6.75
f
6.75
~I/Y
675
Calculate payment.
@
u
PMt=
-147620
Answer: You should pay $1,476.20 each month.
Calculating the present value of a lease with
trade-in value
Your client wishes to buy a machine currently leased from your
company. On a fi ve-year lease with payments of $200 at the
beginning of each month, the machine has a trade-in value of
$1,500 with 34 monthly payments remaining. If your company
sells the machine at the present value of the lease, discounted
at an annual interest rate of 18%, compounded monthly, how
much should your company charge for the machine?
N = 34
......
PV = ?
FV = –$1,500
I/Y = 18%
PMT = –$200
3
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