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Lease Calculator

Any lease: payment, implicit rate or present value.

Calculators Reviews Free · no sign-up
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Leasing against borrowing to buy

Lease payment—
Loan payment to buy outright—
Difference each period—

Lease payment

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Implicit rate—
Present value of the lease—
Amount being financed—
Total of payments—
Finance cost—
Cost including buyout—

Quick Tool Overview

The Lease Calculator handles equipment and property leases in three directions: the payment from an asset value and rate, the implicit rate hidden in a quoted payment, and the present value that current accounting standards put on the balance sheet.

What it does
Solves for lease payment, implicit rate or present value
You give it
Asset value, residual, term and either a rate or a payment
You get back
The unknown figure plus the full payment schedule
Best for
Equipment and commercial leases, and lease-versus-buy decisions
Calculators Free, unlimited use No sign-up Runs in your browser

About the Lease Calculator

This is the general lease calculator, for equipment, property and commercial agreements rather than cars specifically. It solves in three directions: the payment from an asset value and rate, the implicit rate from a quoted payment, and the present value of a lease.

Finding the implicit rate is usually the most valuable of the three, because leases are quoted as payments rather than rates and a payment tells you nothing about whether the deal is competitive. Once you have the rate you can compare leasing against borrowing to buy directly. The present value calculation matters for a different reason: it is the basis on which leases are recognised on a balance sheet under current accounting standards, so it is the number your accountant will want.

Key features of the Lease Calculator

Implicit rate recovered

Leases are quoted as payments, and a payment tells you nothing about whether the deal is competitive.

Present value for accounting

The figure that determines the reported asset and liability under current lease standards.

Lease against buy

Once you have the implicit rate, the lease can be compared directly with financing a purchase.

Residual or buyout handled

A higher residual lowers payments but raises the eventual cost of owning the asset.

Begin or end payments

Leases usually pay in advance, which changes both the payment and the present value.

How to use the Lease Calculator

  1. 1

    Choose what to solve for

    The payment, the implicit interest rate, or the present value of the lease.

  2. 2

    Enter the asset values

    The value at the start and the residual or buyout value at the end of the term.

  3. 3

    Enter the term and known figures

    The number of payments plus either the rate or the payment, depending on the mode.

  4. 4

    Compare against buying

    Use the implicit rate to weigh the lease against financing a purchase outright.

Frequently asked questions

The interest rate built into the payments, given the asset value at the start and the residual at the end. It is what makes a lease comparable to a loan, and it is rarely disclosed voluntarily.

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