User Manual

2: TVM and Amortization Worksheets 47

Example: Present Value of Lease Payments

Procedure Keystrokes Display

Set all variables to defaults.

}

RST 0.00

Set payments per year to 1.

[

P/Y= 1.00



Set beginning-of-period

payments.

]

BGN

Return to calculator mode.

0.00

Enter number of periods.

N= 5.00



Enter periodic interest rate at

which your firm can borrow.

I/Y= 15.00



Enter annual lease payment.

36000

PMT= -36,000.00



Compute present value of

lease payments.

PV= 138,779.22



The present value of the lease payments is greater than the

purchase price of $125,000, so it would be best to buy the server

outright.