Perhaps this is for my own reference but anyone in Seattle’s budget office is welcome to borrow this at any time.
Suppose you have an asset you want to rent or lease out. Let’s set the rate at 2.5%, the term at 99 years, the base payment at $1,000,000 per year, the present value at 0 (since we are looking for what we will make per unit of time, regardless of the speculative value of the asset), and we’ll leave the when-due field blank since it’s not needed for our purposes. I am using Apple’s Numbers application to do this but Excel and Google Sheets also offer the FV function. Let’s see what it produces.
Using those values, a $1M/year payment that increments by 2.5% each year will yield $421,023,077.11 over the full 99 years. That means you will receive $4,252,758.35/year annualized (you’ll get just over $1M the first year but by the end of the lease you will have received more than $400 million). The final payment will $11,244,465.30 — on a $1,000,000 base. Not bad.
If you want to see each year individually or check your work, you can simply enter the base value in a cell, multiply that by base and increment (1.025 in our case) in the next cell, then extend that for the full 99 rows. You can add a cell to sum it all at the bottom and also add on to divide it by 99 to get the annualized rate.