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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?
Yes – 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).
Then to get the factor to divide by, take the 7 year annuity factor minus the 2 year annuity factor.
Thanks 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
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