Lease Calculator
Lease Details
Results
| Monthly Payment | — |
|---|---|
| Depreciation Charge | — |
| Finance Charge | — |
| Total Lease Cost | — |
How to Use This Lease Calculator
Lease quotes hide behind money factors and residual percentages that mean nothing until you convert them. Equipment and asset leases split payment into depreciation (what you use) and finance charge (what the lessor earns). I run both components here before comparing lease vs buy.
- Enter asset value and down payment. Sticker price and any cap-cost reduction upfront.
- Enter residual value as a percent. Estimated end-of-lease value as a percentage of asset value.
- Enter lease term in months. Typical equipment leases run 24–60 months.
- Select rate type and enter rate. APR percent or money factor, depending on how the lessor quotes.
- Press Calculate. Review monthly payment, depreciation charge, finance charge, and total lease cost.
Compare buying with a loan using the Business Loan Calculator, or model auto lease math with the Auto Lease Calculator.
Lease Formulas and Practical Applications
Capitalized cost equals asset value minus down payment. You pay for the difference between cap cost and residual (depreciation) plus interest on the average balance (finance charge).
Depreciation charge
Cap Cost = Asset Value − Down Payment
Residual = Asset Value × (Residual % ÷ 100)
Depreciation = (Cap Cost − Residual) ÷ Term
A $30,000 asset, $3,000 down, 50% residual over 36 months: depreciation about $292/month.
Finance charge
Finance = (Cap Cost + Residual) × Money Factor
Money factor converts from APR: MF ≈ APR ÷ 2400. At 6% APR, MF is about 0.0025.
Total lease cost
Total lease cost equals monthly payment times term plus down payment. Compare against purchase price minus residual if you plan to buy out at lease end.
Frequently Asked Questions
How is a lease payment calculated?
Monthly payment equals depreciation charge plus finance charge. Depreciation is capitalized cost minus residual divided by term. Finance charge applies the money factor to cap cost plus residual.
What is money factor?
Money factor is a lease finance rate. Approximate conversion: money factor equals APR divided by 2400.
What is residual value?
Residual is the estimated asset value at lease end, entered as a percent of asset value. Higher residual lowers the depreciation portion of the payment.
Does down payment reduce the monthly payment?
Yes. Down payment reduces capitalized cost, which lowers both depreciation and finance charges.
Are acquisition fees and taxes included?
No. Acquisition fees, sales tax on payments, and end-of-lease charges are not modeled.