Sharp EL-738 Operation Manual page 31

Procedure
The number of compounding periods per year is automatically set to
12. Press s to exit the P/Y and C/Y settings.
Enter the total number
of payments.
Enter the future value.
Enter payment.
Enter the present value. 2995 v
Calculate the annual
interest rate.
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.
3
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?
PMT = –$200
Key operation
s 24 N
2995 x 10 .
% T
, 145 u
@ f
Calculating the present value of a lease with
trade-in value
PV = ?
I/Y = 18%
. . . . . .
N = 34
Display
24~N
2400
ANS~FV
29950
(-145)~PMT
-14500
2995~PV
299500
I/Y=
708
FV = –$1,500
30