Result
Monthly payment
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This calculation is for informational purposes only and does not replace advice from a qualified professional. Formulas and rates may not fit your exact situation — double-check the figures before making decisions.
How it is calculated
Unlike an ordinary loan, a lease doesn't necessarily pay off the asset in full by the end of the term — part of its value (the residual value) can be paid separately at buyout. So the annuity payment formula uses not the full asset cost minus the down payment, but that amount minus the residual value discounted to today: financed amount = asset cost − down payment − residual value ÷ (1 + monthly rate)^term.
The higher the residual value, the lower the monthly payment — effectively, part of the asset's value shifts to a future buyout payment instead of being spread across monthly payments. This is the standard mechanism that makes lease payments lower than loan payments for the same asset cost and rate.
The calculation gives the financial component of the payment using the classic lease annuity formula — in practice a real lease payment often also includes insurance, property tax and a lessor fee, none of which are accounted for here.