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Time Value of Money – Calculating Lease Payments

This article explains how to calculate lease payments, focusing on equipment leases. It covers basic payment calculations, factoring in residual value and monthly payments. It also explores the complexities of advance payments, where part of the payment is made upfront. The article provides formulas and examples for calculating lease payments both with and without advance payments. For leases with advance payments, it emphasizes how these reduce the total lease amount and payment periods. The tutorial also mentions tools like financial calculators and Excel spreadsheets to simplify the process.

Create Time Value of Money Tables in Excel

Virtually every finance textbook has at the back, a series of tables that contain multipliers that can be used to easily calculate present or future values without the need for a financial calculator. In recent years these tables have given way to financial calculators, but they are still used by some professors and on some professional exams. This tutorial will…

Make-whole Call Provisions on the HP 12C

In recent years, bond issuers have changed from the traditional call schedule to a “make-whole” type of call. Generally, this is good for investors as it makes it less likely that high interest bonds will be called. If it is called, then they are “made whole” because they are paid the present value of the remaining cash flows. In a…

Graduated Annuities on the HP 12C

Strictly speaking, an annuity is a series of equal cash flows, equally spaced in time. However, a graduated annuity (also called a growing annuity) is one in which the cash flows are not all the same, instead they are growing at a constant rate (any other series of cash flows is an uneven cash flow stream). So, the two types…

Bond Valuation on the HP 12C Calculator

A bond is a debt instrument, usually tradable, that represents a debt owed by the issuer to the owner of the bond. Most commonly, bonds are promises to pay a fixed rate of interest for a number of years, and then to repay the principal on the maturity date. In the U.S. bonds typically pay interest every six months (semi-annually),…

Loan Amortization on the HP 17BII

This tutorial explains how to amortize a fixed-rate loan using the HP 17BII financial calculator. It guides users on calculating the principal and interest for individual payments or a range of payments. The article demonstrates using the calculator’s built-in functions to break down loan payments into principal and interest components and how to determine the remaining balance after each payment. Additionally, it briefly compares this method with using a spreadsheet for creating a full amortization schedule, highlighting the limitations and practical applications of the HP 17BII calculator's amortization functions.

Graduated Annuities on the HP 17BII

Strictly speaking, an annuity is a series of equal cash flows, equally spaced in time. However, a graduated annuity (also called a growing annuity) is one in which the cash flows are not all the same, instead they are growing at a constant rate (any other series of cash flows is an uneven cash flow stream). So, the two types…

Valuing Graduated Annuities Using Excel

Strictly speaking, an annuity is a series of equal cash flows, equally spaced in time. However, a graduated annuity is one in which the cash flows are not all the same, instead they are growing at a constant rate. So, the two types of cash flows differ only in the growth rate of the cash flows. Annuity cash flows grow…

Make-Whole Call Provisions on the TI 83 Plus

In recent years, bond issuers have changed from the traditional call schedule to a “make-whole” type of call. Generally, this is good for investors as it makes it less likely that high interest bonds will be called. If it is called, then they are “made whole” because they are paid the present value of the remaining cash flows. In a…

Loan Amortization on the HP 19BII

This tutorial explains how to amortize a fixed-rate loan using the HP 19BII financial calculator. It guides users on calculating the principal and interest for individual payments or a range of payments. The article demonstrates using the calculator’s built-in functions to break down loan payments into principal and interest components and how to determine the remaining balance after each payment. Additionally, it briefly compares this method with using a spreadsheet for creating a full amortization schedule, highlighting the limitations and practical applications of the HP 19BII calculator's amortization functions.

Graduated Annuities on the HP 19BII

Strictly speaking, an annuity is a series of equal cash flows, equally spaced in time. However, a graduated annuity (also called a growing annuity) is one in which the cash flows are not all the same, instead they are growing at a constant rate (any other series of cash flows is an uneven cash flow stream). So, the two types…

Bond Valuation on the TI 83 Plus Calculator

A bond is a debt instrument, usually tradable, that represents a debt owed by the issuer to the owner of the bond. Most commonly, bonds are promises to pay a fixed rate of interest for a number of years, and then to repay the principal on the maturity date. In the U.S. bonds typically pay interest every six months (semi-annually),…

Make-whole Call Provisions on the HP 19BII

In recent years, bond issuers have changed from the traditional call schedule to a “make-whole” type of call. Generally, this is good for investors as it makes it less likely that high interest bonds will be called. If it is called, then they are “made whole” because they are paid the present value of the remaining cash flows. In a…

TI 83 and TI 83 Plus Tutorial, Part III

Uneven Cash Flow Streams In the previous section we looked at the basic time value of money keys and how to use them to calculate present and future value of lump sums and regular annuities. In this section we will take a look at how to use the TI 83 Plus to calculate the present and future values of uneven…

Bond Valuation on the HP 19BII Calculator

A bond is a debt instrument, usually tradable, that represents a debt owed by the issuer to the owner of the bond. Most commonly, bonds are promises to pay a fixed rate of interest for a number of years, and then to repay the principal on the maturity date. In the U.S. bonds typically pay interest every six months (semi-annually),…