HP 10BII Owner's Manual page 65

Example: Lease With Advance Payments. Your company, Quick-Kit
Pole Barns, plans to lease а forklift for the warehouse. The lease is written
fora term of 4 years with monthly payments of $2,400. Payments are due
at the beginning of the month with the first and last payments due at the
onset of the lease. You have an option to buy the forklift for $15,000 at
the end of the leasing period.
If the annual interest rate is 9%, what is the capitalized value of the lease?
Begin Mode
PV=?
44 |45 | 46 | 47 48
PMT = -2,400.00
} (48th payment due up front)
FV=-15,000.00
This solution requires four steps.
1, Calculate the present value of the 47 monthly payments:
(4 х 12)-1= 47.
2. Add the value of the additional advance payment.
3. Find the present value of the buy option.
4. Sum the values calculated in steps 2 and 3.
Step 1. Find the present value of the monthly payments.
Set to Begin mode. Press Б if annunciator is not displayed.
5: Time Value of Money Calculations 65