The amount financed is lowered by a down payment before computing the annual lease payment.
What is a lease payment?
In the world of finance, a lease payment is the equivalent of the monthly rent that is formally stipulated by a contract between two parties, allowing one participant the legal right to use the other person's fixed assets, such as their real estate holdings, manufacturing equipment, computers, and software, for a predetermined period of time.
In essence, the lease arrangement gives the lessor money in exchange for the lessor's limited right-to-use without transfer of ownership to the lessee.
The period of time that the lease payments would be made might vary from a month-to-month schedule, as is typically the case with SaaS business models, to an exceptionally lengthy timetable, such as 100 years, as is frequently the case with land-lease scenarios.
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