Example: Effect on Monthly Payment of Shortening the Lease Term

This example shows how shortening the lease term affects the other lease amounts.

Monthly Payment Calculation $22,300
Cap Cost
$22,300
Cap Cost
$22,300
Cap Cost
Gross capitalized cost $22,300 $22,300 $22,300
Capitalized cost reduction $3,500 $3,500 $3,500
Adjusted capitalized cost $18,800 $18,800 $18,800
Residual value $12,350 $13,800 $15,500
Depreciation and any amortized amounts $6,450 $5,000 $3,300
Rent charge $5,295 $4,156 $2,915
Total of base monthly payments $11,745 $9,156 $6,215
Number of lease payments 48 36 24
Base monthly payment $244.69 $254.34 $258.97

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