How to Compute a Monthly Lease Payment
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Lease payment computations can be complex and prone to errors, especially if the components of the computation are its result need to be transferred between programs, or worse, from external references.
Fortunately, with the "Raise to Power" command in Math functions, documents can compute lease payments on their own.
In English, the formula consists of two major components, one to provide interest-only on any future residual or termination value; the other to provide for the level payment for declining-balance and interest on the amortizing, non-residual balance.
Here is what the formula looks like:
And here, an example where the
Capitalized Cost (the beginning balance) = $3,500
Term = 24 months
Imputed rate = 7.5% per year
Initial payment(s) = 3 monthly payments are made in advance
Here is a screen shot of the data and formulation to include in a form
You can also download the attached working version to copy and paste into your own form.