5: Time Value of Money Calculations 65
Example: Lease With Advance Payments. <RXUFRPSDQ\4XLFN.LW
3ROH%DUQVSODQVWROHDVHDIRUNOLIWIRUWKHZDUHKRXVH7KHOHDVHLVZULWWHQ
IRUDWHUPRI\HDUVZLWKPRQWKO\SD\PHQWVRI3D\PHQWVDUHGXH
DWWKHEHJLQQLQJRIWKHPRQWKZLWKWKHILUVWDQGODVWSD\PHQWVGXHDWWKH
RQVHWRIWKHOHDVH<RXKDYHDQRSWLRQWREX\WKHIRUNOLIWIRUDW
WKHHQGRIWKHOHDVLQJSHULRG
,IWKHDQQXDOLQWHUHVWUDWHLVZKDWLVWKHFDSLWDOL]HGYDOXHRIWKHOHDVH"
7KLVVROXWLRQUHTXLUHVIRXUVWHSV
&DOFXODWHWKHSUHVHQWYDOXHRIWKHPRQWKO\SD\PHQWV
ï²
$GGWKHYDOXHRIWKHDGGLWLRQDODGYDQFHSD\PHQW
)LQGWKHSUHVHQWYDOXHRIWKHEX\RSWLRQ
6XPWKHYDOXHVFDOFXODWHGLQVWHSVDQG
Step 1)LQGWKHSUHVHQWYDOXHRIWKHPRQWKO\SD\PHQWV
6HWWR%HJLQPRGH3UHVV
LIDQQXQFLDWRULVQRWGLVSOD\HG
10B.book Page 65 Wednesday, June 21, 2000 5:19 PM