Lease CalculatorFree online financial calculator — instant results, no sign-up
Monthly payment for any lease with a residual value.
Estimates only, based on the inputs and assumptions shown. This is not financial, investment, tax, or legal advice. Prices, rates and local rules may change; crypto scenarios do not predict returns. Confirm important decisions with a qualified professional.
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About the Lease Calculator
The Lease Calculator computes the fixed monthly lease payment and cumulative payments for any asset with an agreed future residual value. It applies to equipment, vehicles, or personal property leased under standard annuity financing terms. Lessees and business managers use it to compare financing costs and evaluate lease terms against purchasing options.
- Asset value
- The initial capitalized cost or cash purchase price of the asset before lease financing, in dollars.
- Residual value
- The estimated value of the asset at the end of the lease term, in dollars.
- Rate
- The annual lease interest rate or finance charge expressed as an annual percentage.
- Term
- The total duration of the lease agreement, specified in months.
Formula and method
r = rate / 1200 k = Term Monthly Payment = (Asset value − Residual value / (1 + r)^k) × r / (1 − (1 + r)^(−k)) Total payments = Monthly Payment × k
- rMonthly interest rate (annual percentage rate divided by 1200)
- kTotal number of lease payments (lease term in months)
- Asset valueStarting capitalized value of the asset
- Residual valueContractual end-of-term value of the asset
The calculator discounts the residual value back to present value using the monthly interest rate, subtracts that from the initial asset value, and amortizes the net amount over the lease term using standard ordinary annuity factors. Payments are assumed to occur at the end of each period, and total payments represent the monthly payment multiplied by the term length.
Worked example
These are the calculator's starting values and the results it actually produces for them.
Inputs
- Asset value30000 $
- Residual value15000 $
- Rate6 %
- Term36 months
Results
- Monthly payment$531.33
- Total payments$19,127.85
How to use the Lease Calculator
- 1Convert the annual interest rate to an effective monthly decimal rate by dividing by 1,200.
- 2Discount the residual value to its present value using the monthly rate compounded over the term length.
- 3Subtract the discounted residual value from the initial asset value to determine the amortized present balance.
- 4Multiply by the standard annuity amortization factor to get the monthly payment, then multiply by the number of months for the total payments.
Reading your result
The monthly payment reflects the regular billing amount required to cover depreciation and the financing cost over the term. The total payments figure shows the sum of all monthly charges, which excludes any down payment or end-of-term purchase option fee. Comparing total payments plus residual value to the original asset value shows the total carrying cost of the lease structure.
Limitations
The calculation assumes an ordinary annuity where payments are due at the end of each month, rather than an annuity due (payment in advance) typical of consumer auto leases. It also excludes down payments, sales tax, acquisition fees, disposition charges, and mileage or wear-and-tear penalties.
Common questions
Why is this monthly payment different from a standard car dealership quote?+
Dealerships often use a 'money factor' formula, structure payments in advance (first payment due at signing), and roll upfront sales tax or doc fees into the monthly payment.
How does increasing the residual value affect the monthly payment?+
A higher residual value reduces the amount of asset depreciation you finance over the term, which lowers your regular monthly payment.
Does the total payments result include purchasing the asset at the end?+
No, total payments only sums the recurring monthly installments. To acquire the asset outright at lease-end, you would also need to pay the residual value.
Does the calculator save my information?+
Calculations run in your browser. While signed in, inputs and results are automatically recorded in account history; saving a result creates a separate saved record.
Further reading
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Results are estimates for informational purposes and are not financial, medical or legal advice.