WinAmort Professional 2.0

Irregular Loans - Example 2 (Lease)

Hide Navigation Pane

Irregular Loans - Example 2 (Lease)

Previous topic Next topic No expanding text in this topic  

Irregular Loans - Example 2 (Lease)

Previous topic Next topic JavaScript is required for expanding text JavaScript is required for the print function Mail us feedback on this topic!  

Irregular Example - EXAMPLE 2 (Lease)

Mr. Larson, has decided to lease his next car and take advantage of the tax advantages that leases offer. He has seen an automobile that costs $36,000 and after showing the dealer an interest in leasing it, he was given the following lease contract. He can lease the $36,000 automobile for $850.00 per month. He has to make an initial down payment of $2,500 and has to pay some processing charges and Pre-delivery costs that add up to $235.00. The contract will be in effect for 48 months. At the end of this term, Mr. Larson can return the automobile or he can purchase it for $6,000. The terms and conditions all make sense, but what Mr. Larson needs to know is what is the interest rate the leasing company is charging him by leasing the car. In other words what is the Implicit interest rate in the lease contract?


SolveSolve The Implicit Interest Rate.


You can use current dates as they are not specified and not required for this calculation.



action Use all the known information and your knowledge of the Irregular Loan form and fill

in the fields. Then compute the answer.


ico_lite If you are continuing with this example after the last one, you will want to clear

all of the entries made last time.  To clear all the transactions, right click on any

transaction entry and a menu will pop up, select the "DELETE ALL TRANSACTIONS" Item.


transactions popup menu


Once you clear all the transaction, you can enter in all the known data.


Start by entering in the Loan amount and date on the first line. Then compute the Interest Rate.


Check your form with the illustrated one below.


Irregular Loan - Implicit Rate Calc








The Int. Rate field so that the cursor is flashing.



Compute_button Unknown button at the top of the Window.



The Implicit Interest Rate is : 15.7956%


Therefore the interest rate charged for the lease is 15.80%.



From these two examples, you can see how powerful and flexible this Irregular

Loans Form can be. Regardless of the irregularity of the loan or lease scenario,

if you need to compute and keep track of various odd payments and interest

changes, this form is the one to use.