There are many different lease calculations. Each ALMSys calculation results in the definition of a fixed amortization schedule. Each amortization line consists of principal, interest, and other non-capitalized costs called, "additional monthly payments" (periodic taxes and any other periodic charges, which may be other than monthly).

ALMSys uses the amortization schedule as the absolute guide to track the lease. Once the amortization schedule has been calculated, it cannot be changed (unless the lease is extended). There is no daily interest; just the calculated amortization schedule. For loans, the amortization becomes the payment schedule for the deal.

ALMSys has been programmed to calculate the most common lease and loan calculations. Specifically, ALMSys calculates:

This may or may not include interest as part of the first payment. Traditionally, this is used when payments are made at the beginning of each period. The ALMSys "Standard" and "Standard with Interest" types utilize this calculation. (The difference between the two is that Standard has no interest in payment one of the amortization schedule.)

Standard is a present value of annuity due calculation, and uses the following formula:

((( cap - ( ev / (( 1 + rate )^term ))) * rate ) / ( 1 - (( 1 + rate )^-term ))) / ( 1 + rate )

Where:

Total capitalized cost: 20,000.00

End value (residual): 11,000,00

Interest Rate: 7.5%

Term: 36

Resulting base payment: 346.54

This is close to a loan calculation. The following formula is used:

( cap - ( ev / (( 1 + rate )^term ))) / (( 1 - ( 1 / (( 1 + rate )^term ))) / rate )

Total capitalized cost: 20,000.00

End value (residual): 11,000,00

Interest Rate: 7.5%

Term: 36

Resulting base monthly payment: 348.71

ALMSys can also perform the standard money factor calculation. However, the resulting payment must be reverse calculated to come up with an interest rate. The ALMSys Calculation Solver is used to assist with money factor calculations. The money factor formula is:

(( cap - ev ) / term ) + (( cap + ev ) * mf )

Total capitalized cost: 20,000.00

End value (residual): 11,000,00

Money Factor: 2.5 (.0025)

Term: 36

Resulting base payment: 327.50

Resulting Standard Interest Rate: 6.02646%

Resulting Spreadsheet Int. Rate: 5.90210%

This is a special of calculation for Leveraged Financing only.

The balloon (end value) is calculated as:

base price - (base price * payback factor * term)

The monthly principal payment is calculated as:

(base price - cap. reduction - ev ) / term

... which is the same as depreciation book value. This principal remains constant throughout the term.

The interest on this varies from month to month, based on the number of days between payments, as follows:

((beg. bal. * rate) / 365) * days

Base price: 20,000.00

Payback factor: 1.9%

Term: 35 months

Cap. Reduction: 0.00

Rate: 6.5 (.065)

Total capitalized cost: 20,000.00

End value (residual/balloon): 6,700.00

Resulting principal payment: 380.00

Start Date: 11/01/2001

First Payment Due Date: 11/15/2001

Day Due: 15

Beginning Due Date Int. Prin. Ending

20,000.00 11/15/2001 49.86 380.00 19,620.00

19,620.00 12/15/2001 104.82 380.00 19,240.00

19,240.00 01/15/2002 106.22 380.00 18,860.00

etc...

As a result, the total monthly payment amount will vary.