Lease Payment Calculation in the Second Year with CPI Increase

What are the lease payment amounts used to record this lease in the second year?

Based on the given data, how can we calculate the lease payment for the second year with the CPI increase?

Lease Payment Amount in the Second Year:

The lease payment amount used to record this lease in the second year is $5,150.

To calculate the lease payment amount for the second year, we need to consider the increase in the Consumer Price Index (CPI). In the first year, the lease payment is $5,000 per month. In the second year, the CPI increases by 3%.

To find the lease payment amount for the second year, we can use the following formula:

Lease payment amount for the second year = Lease payment amount for the first year + (Lease payment amount for the first year * CPI increase percentage)

Substituting the values:

Lease payment amount for the second year = $5,000 + ($5,000 * 0.03)

Simplifying the equation:

Lease payment amount for the second year = $5,000 + $150

Lease payment amount for the second year = $5,150

By using this calculation, we can determine that the lease payment amount for the second year with a 3% CPI increase is $5,150. This shows that the lease payments increase over time, reflecting the changes in the Consumer Price Index.