Look at your lease contract to see how the adjusted lease balance is calculated. It is calculated in many different, but equivalent ways. One way to do it is the add the sum of the remaining depreciation payments to the residual value. To do that, you’ll need to create a lease amortization schedule like the one below…
Or, equivalently, you can add the sum of the remaining payments to the residual value and subtract the sum of the remaining rent (interest) charges. Again, you’ll need an amortization schedule. Another way to compute the adjusted lease balance is to use the Excel formula with the following syntax…
Adj. Lease Balance = PV(RATE, # of payments remaining,- base payment,-residual,1)
where
RATE = RATE(term,base pay,-adj. cap,res,1)
You must compute RATE first, then insert it in the PV expression. RATE is the lease amortization interest rate implicit in the lease. Lease contracts refer to it as the actuarial of constant yield rate.
If you buyout within 30 days of lease inception, then the easiest way to compute the adjusted lease balance is as follows…
adjusted lease balance = (adjusted cap cost - 1st base payment) x (1 + RATE)
Your buyout is the adjusted lease balance plus any applicable taxes and fees.
The 1st payment is due at lease signing in which the entire amount is treated as a depreciation payment. However, interest (rent charges) is always levied one month in advance Unless, I’m mistaken, you didn’t provide enough information for me to compute the RATE. In need the base payment and residual.