Sharp EL-738 operation manual 2400, 14500, 299500, 708

Procedure

Key operation

Display

The number of compounding periods per year is automatically set to 12. Press sto exit the P/Y and C/Y settings.

Enter the total number	s	24		N			24~N
of payments.							2400
Enter the future value.	2995		x		10	.	ANS~FV
	%T						29950
Enter payment.	,145 u						(-145)~PMT
							-14500
Enter the present value.	2995 v						2995~PV
							299500
Calculate the annual	@f						I/Y=
interest rate.							708

Answer: If you lease the computer system, the annual interest rate would be 7.08%, which is less than that of the interest rate on a two-year loan, so it would be more cost-effective to lease a computer system than to purchase one.

3 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 five-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?

PV = ?

I/Y = 18%

. . . . . .

PMT = –$200

N = 34 FV = –$1,500

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