Monday, May 11, 2009


Hey everyone! Today in math class, we learned about leasing. We started the day with the usual 'going over the homework' and then Mr. K put us right into the lesson on leasing.
From what I understand, leasing is when someone is giving another person either land, property, car, etc. to another person for a certain amount of time. Its like a rental agreement that can last for years. What also happens is that people who are leasing, have to make monthly payments for
•'sales tax' to that depreciation
and 'interest on the unpaid value' of the item that is being used.
Depreciation means that there is a reduction of value in that item as time passes by. For example, the more you wear a brand new pair of jeans and as time goes by, the jeans start to fade out, decreasing the value of the jeans.
Sales tax is the tax that has to be paid for a section of that item that is being used. For example, a car that you decide
d to lease for three years, you only pay a portion for the car because you only use it for a certain amount of time and then you have to give the car back. During the time you have the car, you are paying taxes for the portion that you used.

Interest is when you pay at a particular rate for what you are leasing

When you are done leasing the item, You would either return it to the person that loaned you the item or you can buy the item. What this is called is 'Residual Value'. It's the amount (cost) of the being sold.

Mr. K also showed us a way to see how depreciation works with the calculator.

Ex. A car depreciates 20% per year. What is it worth in 5 years?

This is what it would look like on the calculator

What we did was you take 100% and subtract 20% from it, giving you 80%
Then we did 100*0.80 which equaled to 80.
What you would do next is you have to press on the multiplication button on your calculator and then it what would pop up is Ans* and then you punch in 0.80.
Press enter 4 more times to give you how much it would be worth in 5 years.
The car is worth 32.768 in five years.

The next scribe will be, K_Hannah (:


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