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Effective interest paid - need formula/function
I would like to calculate the effective interest paid on a lease. If the
asset value is $55k, and the lease payments are $2,519 for 2 years with a residual asset value of $1 at the end of the lease, what is the effective interest rate? Note that the first payment is double ($5,038), with 22 monthly payments thereafter. |
#2
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Effective interest paid - need formula/function
Since your payments are not equal, you will want to use the IRR function. This would require you to list out all of the payments as such: 55000 -5038 -2519 -2519 -2519 -2519 -2519 -2519 -2519 -2519 -2519 -2519 -2519 -2519 -2519 -2519 -2519 -2519 -2519 -2519 -2519 -2519 -2519 -2519 0 1 =IRR(above range) The answer is 0.84% x 12 = 10% Of course, I assumed you had the "free" month at the end....instead of immediately after the double-month at the beginning. -- Lotus123 ------------------------------------------------------------------------ Lotus123's Profile: http://www.excelforum.com/member.php...o&userid=28611 View this thread: http://www.excelforum.com/showthread...hreadid=486294 |
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