Leasing Calculator

Currency

Asset price

Advance, %

Term, months

Rate, % a year

Residual payment, %

Result

Monthly payment

$74,556.21

Advance

$600,000.00

Residual payment

$450,000.00

Sum of the payments

$2,684,023.72

Total with advance and residual

$3,734,023.72

Markup over the price

$734,023.72

This result is informational only and is not professional advice.

A lease is an annuity with a lump at the end

Calculates a lease payment from the asset price, the advance, the term and the residual payment, and shows the total markup over the price.

A lease looks like a loan and is priced like one, with a twist: part of the value is not repaid month by month. It is left as a residual — a single payment at the end that buys the asset outright.

That is why lease payments look low. The residual has to be discounted back to the present before the monthly figure means anything, and that is what this calculation does.

What this calculator shows

The monthly payment, the advance and the residual
The sum of the payments and the total cost of the deal
The markup — everything paid above the price of the asset

What to keep in mind

The rate is applied as a normal annuity on the financed part, with the residual discounted over the term.
Insurance, registration and servicing are not included. In a real lease they are often bundled in and can add a great deal.

FAQs

What is a residual payment?

The final payment that transfers ownership. Until it is made the asset belongs to the lessor, however long you have been paying.

How is a lease different from a loan?

Ownership. Under a loan the item is yours from day one and pledged as security; under a lease it stays with the lessor until the residual is paid.

Why is the lease payment lower than a loan payment?

Because a slice of the price is deferred to the end. The monthly figure is smaller, the total is not necessarily.

What does markup mean here?

Everything paid above the price of the asset, expressed in money rather than as a rate. It is the figure to compare between offers, because lessors quote rates on different bases.

Worked example

A three-million asset over three years

Input: 3,000,000, a 20 percent advance, 36 months at 16 percent, a 15 percent residual

Output: about 74,556 a month

Note: The advance is 600,000, the residual 450,000, and the whole deal comes to about 3.73 million — a markup of roughly 734,000 over the price.

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Leasing Calculator

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