34 Time-Value-of-Money and Amortization Worksheets
The total value of the machine is the present value of the residual value
plus the present value of the lease payments.
Answer: Peach Bright should pay your company $40,573.18 for the
machine.
Example: Computing Other Monthly Payments
If you finance the purchase of a new desk and chair for $525 at 20% APR
compounded monthly for two years, how much is the monthly payment?
To Press Display
Set all variables to defaults. & } !
RST 0.00
Set beginning-of-period
payments.
& ] & V
BGN
Return to standard-calculator
mode.
& U 0.00
Enter number of payments.
46 ,
N=
46.00
Calculate and enter periodic
interest rate.
22 6 12 N -
I/Y=
1.83
Enter residual value of asset.
6500 S 0
FV=
-6,500.00
Compute residual present value. % .
PV=
2,818.22
Enter lease payment amount.
1200 S /
PMT=
-1,200.00
Compute present value of lease
payments.
% .
PV=
40,573.18
To Press Display
Set all variables to defaults. & } !
RST 0.00
Set payments per year to 12. & [ 12 !
P/Y=
12.00
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