Lease Calculator

How this result is built

Estimate an equipment or general lease payment from cap cost, residual, and money factor.

A closed-end lease payment covers the drop from the cost you finance down to the residual, plus a finance charge. The finance charge here is the money factor times the sum of the adjusted cap cost and the residual. That is the standard retail lease structure, useful for equipment as well as vehicles.

What the opening example is for

If the contract quotes an interest rate instead of a money factor, divide the rate by 2,400 for a rough factor. A 7.2% rate is about 0.00300.

The walkthrough below uses the numbers already sitting in Lease Calculator. Press Calculate and the headline should match this page. Then put your own figures in. The math does not run until you press the button, and Clear hides the result.

What each field is doing

The “Asset cost” line on Lease Calculator starts at $25,000.00. The other fields stay put while you change this one. That is the clean way to see what this line is doing inside the result.

Lease Calculator treats “Amount paid up front” as its own entry, and the form opens with $2,000.00. If the label is a rate, type the annual figure the contract uses. If it is money, type the amount that will actually move, not a rounded hope.

Before you replace it, “Residual” reads 40% on Lease Calculator. Leave that figure only when it matches the statement, the quote, or the plan you are testing. Press Calculate after the edit so the chart and the schedule move with it.

The remaining fields

Look at “Money factor” first if you are checking Lease Calculator: the filled value is 0.00. A round example is useful for learning the page. It is a poor substitute for the number on your own paperwork, so replace it and run the form again.

The “Term” line on Lease Calculator starts at 48. The other fields stay put while you change this one. That is the clean way to see what this line is doing inside the result.

Lease Calculator treats “Tax on the payment” as its own entry, and the form opens with 0%. If the label is a rate, type the annual figure the contract uses. If it is money, type the amount that will actually move, not a rounded hope.

The opening result, line by line

Press Calculate on the opening form and Monthly lease payment is $369.83. That is the number the rest of this section is talking about.

Depreciation portion is $270.83 when you run the opening figures on Lease Calculator. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

On this opening pass, finance portion is $99.00. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

Lease Calculator reports that residual value is $10,000.00. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

How those lines were produced

Due at signing (down payment) is $2,000.00 when you run the opening figures on Lease Calculator. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

Money factor is the lease’s financing charge. A rough translation is APR ÷ 2,400.

A second pass changes only “Asset cost”, from $25,000.00 to $27,500.00. Monthly lease payment moves from $369.83 to $411.58. Nothing else on the form was edited, so the gap between those two results is the effect of that one field on Lease Calculator. If the gap is tiny, this page is not very sensitive to that entry. If the gap is large, get that entry from a document before you plan around the result.

What this page will not claim

Lease Calculator uses the operating numbers on the form. It does not file a return, set a price for you, or know which costs your accountant would call fixed. Read the result next to the books, not instead of them.

Lease Calculator stops at its own formula. When the next question is different, open Auto Lease Calculator (Depreciation, money factor, and tax on the payment.); Business Loan Calculator (Note rate and fees, stated as APR.); Payment Calculator (The payment that links a balance to a future value.). Do not add those results to this one as if they were the same kind of dollar.

Check the result before you use it

Start on Lease Calculator by reading the labels, not the headline. The opening labels are Asset cost ($25,000.00), Amount paid up front ($2,000.00), Residual (40%), Money factor (0.00), Term (48), Tax on the payment (0%). If a label is not the fact you have, the result cannot turn into that fact later. The illustration on the form lands on $369.83. When you press Calculate and see that same figure, the button and this explanation are using one formula.

Change one field at a time. Write down the headline, edit a single line, and press Calculate again. A large jump means that line carries the result. A line that does not move is a line the formula ignores, which is a reason to confirm you opened the right page. Lease Calculator is built for one job: Depreciation plus a finance charge. The description on the page says the same thing in a sentence: Estimate an equipment or general lease payment from cap cost, residual, and money factor.

When the paperwork disagrees

Then hold the headline next to a source outside the site. That source might be a loan estimate, an account statement, a pay stub, or the public limit named in the methodology. A few cents of difference on a long schedule is ordinary rounding. A different rate, a fee you never typed, or a tax the form does not ask for is not rounding. Correct the input. Do not average the page with the paperwork.

When the outside source still disagrees, Lease Calculator has reached the edge of what it will claim. It will not phone a lender, pull a county record, or apply a credit you left blank. Send the calculator name, every input, and the result you expected through the contact page if you think the formula itself is wrong. Until that is settled, read $369.83 as the output of the fields above and nothing else.

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