Calculation Method 4 for Years Vacant (Forecasted Amount for Years 7 through 10)
The system uses this setup information for this calculation:
Growth Pattern (from assumption header): FIXED.
New Rate (from assumption detail): 3.00.
Growth Pattern (from assumption detail): FIXED01.
Term of Assumption: 4 years.
After the term of the real estate lease expires, the system uses the same formula to forecast the term of the assumption (four years), but derives the base amount by adding the first seven years of the growth pattern from the assumption header instead the recurring billing amounts.
This table shows how the system compounds the amounts that it uses in the calculation:
Year |
Growth Pattern FIXED Compounded |
Calculation for Base Amount |
|---|---|---|
7 |
1,000 + 2,000 + 3,000 + 4,000 + 5,000 + 6,000 + 7,000= 28,000 |
100,000 + 28,000 = 128,000 |
8 |
1,000 + 2,000 + 3,000 + 4,000 + 5,000 + 6,000 + 7,000+ 8,000 = 36,000 |
100,000 + 36,000 + 136,000 |
9 |
1,000 + 2,000 + 3,000 + 4,000 + 5,000 + 6,000 + 7,000+ 8,000 + 9,000 = 45,000 |
100,000 + 45,000 + 145,000 |
10 |
1,000 + 2,000 + 3,000 + 4,000 + 5,000 + 6,000 + 7,000+ 8,000 + 9,000 + 10,000 = 55,000 |
100,000 + 55,000 + 155,000 |
Total base amount:128,000 + 136,000 + 145,000 + 155,000 = 564,000
The system multiplies the total base amount by the sum of the rate from the assumption detail and the growth pattern amount (compounded) from the assumption detail to derive the forecasted amount:
Year |
Calculation: Total Base Amount x (RTD + GPF) = FA |
|---|---|
1 |
564,000 × (3.00 + 50.00) = 29,892,000 |
2 |
564,000 × (3.00 + 50.00 + 100.00) = 86,292,000 |
3 |
564,000 × (3.00 + 50.00 + 100.00 + 125.00) = 156,972,000 |
Total forecasted amount for three years:29,892,000 + 86,292,000 + 156,972,00 = 272,976,000
The system updates the total forecasted amount to the first period of the first year that the real estate lease is effective in the F15L109 table. In this example, the system updates the total forecasted amount to period 01 of 2008.