How the equipment lease estimate works
The calculator solves for a level monthly payment whose present value, together with the stated end payment, equals the equipment cost. It treats the quoted annual rate as nominal and divides it by 12. You can choose rentals in arrears, one rental in advance or three rentals in advance; all advance rentals count toward the total term.
US equipment lease offers may describe a fair-market-value option, a fixed purchase option or a factor rate. Enter a stated residual or buyout amount only if it is part of your agreement. A factor rate is not an APR and cannot be substituted for the annual rate this model uses.
Worked example
For $50,000 of equipment at an 8% nominal annual rate over 36 months, with a $5,000 end payment and one rental upfront, the estimated monthly payment is $1,433.91. One $1,433.91 rental is due at signing, followed by 35 monthly rentals.
If the $5,000 end payment is made, scheduled rentals total $51,620.77, total cash paid is $56,620.77 and the estimated finance charge is $6,620.77 before fees, taxes or other costs. The figures are illustrative and do not represent a lender quote.
Residuals, buyouts and excluded costs
A quoted residual affects the monthly payment because part of the value is due at the end. A lower monthly payment can therefore leave a larger final obligation. If the agreement lets you return the equipment instead, do not treat a purchase option as mandatory; the total-cash figure shown here assumes you make the entered end payment.
This estimate excludes sales or use tax, fees, refundable security deposits, maintenance, insurance, fair-market-value appraisal, early termination, tax and accounting treatment, and lease-factor pricing. Review the actual contract and request the lessor's full payment schedule.
Inputs for the US equipment lease calculator
Equipment cost
The price being financed before fees and tax. It is the present value used in this estimate.
Quoted nominal annual rate
Enter a stated annual interest rate. Lease factors, money factors and APRs that include fees are different measures.
Lease term
Number of monthly rental periods in the contract, entered as whole months.
Quoted residual or buyout
Use a contractual end payment. A fair-market-value estimate can change and is not calculated here.
Advance rentals paid at signing
Choose 0, 1 or 3 rentals at signing. Those rentals count toward the selected term.
CALCULATOR QUESTIONS
US equipment lease calculator questions
Does a higher residual lower the payment?
Yes. More of the equipment value is left for the end payment, so the scheduled monthly rentals are lower. Check the total cash due if you plan to buy the equipment.
Does the calculator decide a fair-market-value buyout?
No. Enter a contractual amount only. The actual fair-market-value option can depend on the lessor's process and the asset at lease end.
Can I enter a lease factor instead of an interest rate?
No. A factor rate is a separate quote convention. Use an annual interest rate from the contract or request a payment schedule from the lessor.
Does this include tax or fees?
No. It excludes taxes, fees, deposits, maintenance and accounting treatment. Check the agreement and consult an appropriate adviser.