Sharp EL-120 Specifications download pdf (Page 31)

Procedure Key operation Display

The number of compounding periods per year is automatically set to

12. Press

to exit the P/Y and C/Y settings.

Enter the total number

of payments.

24~N

2400

Enter the future value.

2995

ANS~FV

29950

Enter payment.

145

(-145)~PMT

-14500

Enter the present value.

2995

2995~PV

299500

Calculate the annual

interest rate.

I/Y=

708

Answer: If you lease the computer system, the annual interest

rate would be 7.08%, which is less than that of the

interest rate on a two-year loan, so it would be more

cost-effective to lease a computer system than to

purchase one.

Calculating the present value of a lease with

trade-in value

Your client wishes to buy a machine currently leased from your

company. On a ﬁ ve-year lease with payments of $200 at the

beginning of each month, the machine has a trade-in value of

$1,500 with 34 monthly payments remaining. If your company

sells the machine at the present value of the lease, discounted

at an annual interest rate of 18%, compounded monthly, how

much should your company charge for the machine?

N = 34

......

PV = ?

FV = –$1,500

I/Y = 18%

PMT = –$200

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Sharp EL-120 Specifications Page 31

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