Effective interest paid - need formula/function

[Guest]

I would like to calculate the effective interest paid on a lease. If the
asset value is $55k, and the lease payments are $2,519 for 2 years with a
residual asset value of $1 at the end of the lease, what is the effective
interest rate? Note that the first payment is double ($5,038), with 22
monthly payments thereafter.

 

[Lotus123]

Since your payments are not equal, you will want to use the IR
function. This would require you to list out all of the payments a
such:

55000
-5038
-2519
-2519
-2519
-2519
-2519
-2519
-2519
-2519
-2519
-2519
-2519
-2519
-2519
-2519
-2519
-2519
-2519
-2519
-2519
-2519
-2519
-2519
0
1

=IRR(above range)

The answer is 0.84% x 12 = 10%

Of course, I assumed you had the "free" month at the end....instead o
immediately after the double-month at the beginning