How it works
Calculate monthly lease payments for equipment or property given a residual value.
Input query strings and outputs
Use an input name in this page’s URL as ?name=value, and join additional inputs with &. Portable shared links may instead use the compact ?ac= state parameter.
Input query strings
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?assetValue=Asset Value (Cost)Number · Optional · Default: 50,000
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?residualValue=Residual Value (Buyout)Number · Optional · Default: 10,000
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?term=Lease Term (Months)Number · Optional · Default: 36
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?interestRate=Interest RateNumber · Optional · Default: 6
Outputs
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resultResultText · Primary output
result contains the calculator’s complete rendered result area, including its visible result cards, tables, charts, and messages.
Calculate payments for equipment or property leases
Description
The Lease Calculator is a technical tool used to determine the monthly installments for “capital” or “finance” leases. Unlike a simple loan, a lease often includes a Residual Value—a pre-set price at which you can buy the asset at the end of the term. This calculator determines the interest and principal components needed to pay down the asset value to that specific residual floor.
Inputs
- Asset Value (Cost): The total original price or value of the item being leased ($).
- Residual Value (Buyout): The agreed-upon price of the asset at the end of the lease term ($).
- Lease Term (Months): The duration of the lease agreement.
- Interest Rate: The annual interest rate (or “lease rate”) applied to the financing (%).
Outputs
- Monthly Payment: The payment required each month.
- Total Lease Cost: The sum of all monthly installments over the term.
- Total Finance Charge: The total interest cost included in the lease.
Chart
- N/A: This tool provides a direct numeric analysis of lease terms.
“Good to Know”
- In a lease, you are essentially “renting” the portion of the asset’s value that is used up over the term.
- Higher residual values result in lower monthly payments, as you are amortizing less of the original cost.
- Capital leases are often treated as debt on a business’s balance sheet, while operating leases may be handled differently for accounting purposes.
Examples
Example 1: Business Equipment
- Input:
- Cost: $50,000, Residual: $10,000
- Term: 36 Mo, Rate: 6%
- Output:
- Monthly Payment: ~$1,241
- Total Interest: ~$4,680
Example 2: Zero-Residual Lease (Full Payoff)
- Input:
- Residual: $0
- Output:
- The lease functions exactly like a standard amortizing loan.
Example 3: Low-Payment / High-Buyout
- Input:
- Cost: $100,000, Residual: $40,000
- Output:
- Highlights how keeping a large residual value significantly lowers the monthly cash flow requirement.