Hi,
What is the formula for Present Value in Lease Accounting? I comparing it to the excel PV formula
I don’t seem to get it match?
Any idea?
Thanks!
Solved
What is the formula for Present Value in Lease Accounting?
+9Best answer by Janith Bandara
Hi
Usually the formula is [1/(1+r)^np] *Lease payment
for an example if the schedule consists of 12 months the PV calculation is as follows
PV calculation of Installment No 1 is 99173.55
It is calculated as follows
1/(1+10%/12)^1=0.9917355
0.9917355*100000=99173.55
PV calculation of Installment No 2 is 98353.94
It is calculated as follows
1/(1+10%/12)^2=0.9835394
0.9835394*100000=98353.94
BR/Janith
This topic has been closed for comments
Hi
Usually the formula is [1/(1+r)^np] *Lease payment
for an example if the schedule consists of 12 months the PV calculation is as follows
PV calculation of Installment No 1 is 99173.55
It is calculated as follows
1/(1+10%/12)^1=0.9917355
0.9917355*100000=99173.55
PV calculation of Installment No 2 is 98353.94
It is calculated as follows
1/(1+10%/12)^2=0.9835394
0.9835394*100000=98353.94
BR/Janith
+9Hi
Thanks for the answer but I getting a different value base on your formula?
How to do “^1” in a normal calculator?
I’d used google to calculate and this is what I got
Hi
You need to divide rate by 12 months to get the monthly compound rate.That is 10%/12
10%=0.1
BR/Janith
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