Table 6-15 Calculating the present value of the last cash flow
Keys
:Ì
JV:::yÉ
Ï
Step 4
Add the results of 'Step 2' and 'Step 3'.
Table 6-16 Calculating the present value of lease
Keys
1p4
Amortization
Amortization is the process of dividing a payment into the amount that applies to interest and
the amount that applies to principal. Payments near the beginning of a loan contribute more
interest, and less principal, than payments near the end of a loan.
74
Time Value of Money Calculations
Display
Description
0.00
Stores zero payment for this step
of solution.
- 1 5,000.00
Stores value to discount.
10,479.21
Calculates the present value of
last cash flow.
Display
Description
108,356.77
Calculates the present (capitalized)
value of lease. (Rounding
discrepancies are explained on
page 67.)
Figure 16 Graph