On January 15, 2017, Stiller Co. leased a $67,000 piece of equipment from Centurion Leasing Limited. The lease had the following terms:

• The initial lease term is 3 years and is non-cancellable with no renewal options.
• Payments are $32,000, due each January 15.
• Payments include $10,000 for maintenance and insurance.
• The equipment has an estimated life of 4 years.
• At the end of the lease term, the asset reverts to the lessor, although it is expected to have a residual value of $5,000 which is guaranteed by Stiller Co.
• Centurion is a large leasing company specializing in equipment leases.
• Centurion pays the exact amount of the estimated maintenance and insurance costs to a third party each year on January 15.
• Stiller Co.'s incremental borrowing rate is 12.50%. The implicit rate is 12%, which is known to Stiller Co.
• Stiller Co.'s uses straight-line depreciation for similar equipment that it owns.
• Collectability of the payments is reasonably predictable and there are no important uncertainties about costs that have not yet been incurred by the lessor.
• Both companies' year-ends are December 31 and they both follow ASPE.

a) Calculate the net present value (NPV) of the lease payments.

I do not understand how the NPV was calculated. my calculation get me 56,399.18914

but the NPV is = $62,740.02. can someone please explain my error?

This is the Values I input into my BA II Plus calculator:

PMT = 22,000 (32,000 - 10,000)

I/Y = 12%

N = 3

5000 = FV