ABC Co. has a machine that cost $600,000. It is to be leased for 15 years with rent received at the beginning of each year. ABC wants a return of 9.5%. Compute the amount of the annual rent.

Compute the annual rents of leased equipment

Enter the known variables.

The present value, PV, is $600,000.

The rate is 9.5%.

The number of periods, NPER, is 15.

The Type = 1, since payment is at the beginning of the year

We go to the Formulas tab and look for the PMT function.