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Example: Effect on Monthly Payment of Changing the Capitalized
Cost Reduction
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This example shows how changing the capitalized cost reduction affects
the other lease amounts. |
| Monthly Payment Calculation | $3,500 Capitalized Cost |
$1,000 Capitalized Cost |
No Capitalized Cost Reduction |
|---|---|---|---|
| Gross capitalized cost | $22,300 | $22,300 | $22,300 |
| Capitalized cost reduction | $3,500 | $1,000 | $0 |
| Adjusted capitalized cost | $18,800 | $21,300 | $22,300 |
| Residual value | $12,350 | $12,350 | $12,350 |
| Depreciation and any amortized amounts | $6,450 | $8,950 | $9,950 |
| Rent charge | $5,295 | $5,720 | $5,890 |
| Total of base monthly payments | $11,745 | $14,670 | $15,480 |
Number of lease payments |
48 | 48 | 48 |
| Base monthly payment | $244.69 | $305.63 | $330.00 |
| Return |