Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › lease payment calculation
- This topic has 5 replies, 2 voices, and was last updated 6 years ago by John Moffat.
- AuthorPosts
- December 17, 2017 at 11:13 am #423819
if i am given an amount like 6000 to lease over 5 years at 10%. Can I just take the 6000 and divide it by the 5 year annuity of 10% to get the payment including interest?
December 17, 2017 at 2:51 pm #423837Yes – if the first lease payment is in 1 years time.
If the first lease payment is immediately then you need to divide by (1 + 4 year annuity factor).
December 17, 2017 at 3:05 pm #423839and if the first payment is due in the beginning of the 3rd year?
December 18, 2017 at 7:59 am #423897Then to get the factor to divide by, take the 7 year annuity factor minus the 2 year annuity factor.
December 19, 2017 at 4:31 am #424029Thanks John
And so i have realised that if you create a table over 25 years for example at say 9.6% and payments start at the beginning of year 3 I just add up the tables from y3 to y25 and divide initial capital by that figure and if using an excel sort of self made table it takes into account interest on years not paid….. Thanks
December 19, 2017 at 7:54 am #424037You are welcome 🙂
- AuthorPosts
- The topic ‘lease payment calculation’ is closed to new replies.