Understanding the Mathematical Progression for Periodic Payments
Question
In a motor vehicle lease, a mathematical progression showing how the periodic payment is derived, containing the following information:
Answers
Explanations
Click on the arrows to vote for the correct answer
A. B. C. D.D
The term "crcm" is not a commonly used acronym in the context of motor vehicle leases. However, based on the given description, it appears that the question is referring to the calculation method used to determine the periodic lease payments for a motor vehicle lease.
The calculation method typically involves several key factors, including:
A. Gross capitalized cost (including the agreed-on value of the vehicle): This refers to the total cost of the vehicle, including any taxes, fees, and other charges that may be included in the lease. The gross capitalized cost is an important factor in determining the monthly lease payment, as it forms the basis for the depreciation charge.
B. Rent charge (the difference between the total of base payment over the lease term minus the depreciation and any amortized amounts): The rent charge is essentially the cost of borrowing the money to lease the vehicle. It is calculated by subtracting the depreciation and any amortized amounts (such as upfront fees or rebates) from the total of base payments over the lease term. The rent charge is typically expressed as an annual percentage rate (APR), which is used to calculate the finance charge for each monthly payment.
C. Itemization of other charges that are part of the periodic payment: This refers to any other fees or charges that may be included in the lease payment, such as taxes, licensing fees, or insurance. These charges are typically itemized separately from the base payment and the rent charge.
To calculate the periodic lease payment, the gross capitalized cost is first reduced by any down payment or trade-in value. The remaining balance is then divided by the number of months in the lease term to determine the base payment. The rent charge is calculated based on the APR and added to the base payment to determine the total monthly lease payment. The itemized charges are then added to the total lease payment to arrive at the final amount due each month.
In summary, the calculation method used to determine periodic lease payments for a motor vehicle lease involves considering several key factors, including the gross capitalized cost, the rent charge, and any other charges that may be included in the periodic payment.
