Lease Calculations

A lease is a loan of valuable property (like real estate, automobiles, or equipment) for a specific amount of time, in exchange for regular payments. Some leases are written as purchase agreements, with an option to buy at the end of the lease (sometimes for as little as 1.00). The defined future value (FV) of the property at the end of a lease is sometimes called the residual value or buy out value.

All five TVM application keys can be used in lease calculations. There are two common lease calculations.

•Finding the lease payment necessary to achieve a specified yield.

•Finding the present value (capitalized value) of a lease.

The first payment on a lease usually occurs at the beginning of the first period. Thus, most lease calculations use Begin mode.

Example: Calculating a Lease Payment

A customer wishes to lease a 13,500 car for three years. The lease includes an option to buy the car for 7,500 at the end of the lease. The first monthly payment is due the day the customer drives the car off the lot. If you want to yield 10% annually, compounded monthly, what will the payments be? Calculate the payments from your (the dealer’s) point of view.

Figure 14 Cash flow diagram (Calculate the monthly lease payment)

Set to Begin mode. Press \¯if BEGIN annunciator is not displayed.

Time Value of Money Calculations 71

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HP 10bII+ Financial manual Lease Calculations, Cash flow diagram Calculate the monthly lease payment
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10bII+ Financial specifications

The HP 10bII+ Financial Calculator is a versatile and powerful tool designed to meet the needs of finance students, professionals, and anyone involved in financial planning and analysis. Known for its compactness and user-friendly interface, this calculator incorporates a range of features specifically tailored for financial calculations, making it an essential gadget for banking, real estate, and investment analysis.

At the heart of the HP 10bII+ is its ability to perform a wide variety of financial functions, including time value of money calculations, cash flow analysis, bond pricing, and depreciation. Its built-in functions facilitate the computation of interest rates, present and future values, net present value (NPV), internal rate of return (IRR), and annuities. This array of functionalities allows users to tackle complex financial problems with ease.

One of the standout technologies in the HP 10bII+ is its RPN (Reverse Polish Notation) input system, which allows for efficient data entry and calculation. Users can perform consecutive calculations without the need for parentheses, streamlining the process significantly. Alternatively, the calculator can also function with a standard algebraic input, catering to different user preferences.

The design of the HP 10bII+ is sleek and compact, making it highly portable and easy to handle. With a large, easy-to-read display, it ensures that users can view their calculations clearly, even in low-light environments. The keys are well-spaced and tactile, allowing for a comfortable typing experience during intensive calculations.

The calculator also offers a range of memory functions, enabling users to store and recall important values easily. This is particularly useful for financial professionals who must deal with multiple calculations and refer back to previous results frequently.

Additionally, the HP 10bII+ is powered by two AAA batteries, providing a long battery life that ensures reliability during extended use. It also features an automatic shut-off function, which conserves battery life when the calculator is not in use.

In summary, the HP 10bII+ Financial Calculator is a high-performance device that combines essential financial functions with user-friendly design and robust technology. Whether for educational purposes or professional finance work, its capabilities make it an invaluable asset for anyone dealing with financial calculations and decision-making.
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