Monthly Lease Payment Calculator: Easily Determine Your Leasing Costs

How to use the tool

1. Asset Value (USD) – Type the equipment or vehicle price.
   Example 1: 12 000 Example 2: 55 000
2. Monthly Lease Interest Rate (%) – Enter the periodic rate, not the annual rate.
   Example 1: 0.60 Example 2: 1.10
3. Number of Payments – Add total months in the lease.
   Example 1: 24 Example 2: 60
4. Click “Calculate” – Your monthly payment appears instantly.

Formula used

The calculator applies the standard amortising-payment equation:

$$P = rac{A \times r}{1 – (1 + r)^{-n}}$$

• P = monthly lease payment
• A = asset value
• r = monthly interest rate (decimal)
• n = total payments

Example calculations

• $12 000 asset, 0.6 % monthly, 24 payments: $$P \approx rac{12000 \times 0.006}{1-(1.006)^{-24}} \approx \$538$$
• $55 000 asset, 1.1 % monthly, 60 payments: $$P \approx rac{55000 \times 0.011}{1-(1.011)^{-60}} \approx \$1 257$$

Quick-Facts

• Average U.S. equipment lease term: 36 months (ELFA, 2023).
• Median small-business loan rate: 7.5 % annual → 0.625 % monthly (Federal Reserve, 2023).
• “A lessee shall measure the lease liability at the present value of lease payments” (IFRS 16:26).
• Average new-car lease payment: $516/month (Experian, 2023).

FAQ

What is a lease payment?

A lease payment is the fixed amount you pay each month to use an asset while gradually repaying its cost and interest (Kieso & Weygandt, 2022).

How does the calculator work?

It inserts your inputs into the amortising-payment formula and outputs the result in milliseconds—no personal data stored.

Why use the monthly rate instead of annual?

Using the same period for rate and payment prevents compounding errors and matches typical lease billing cycles (Brigham & Ehrhardt, 2022).

How do I convert an annual rate?

Divide by 12. Example: 7.2 % annual → 0.6 % monthly.

Does the formula include residual value?

No. If your contract has a residual (balloon) payment, add that separately to the final cash-flow estimate.

What factors raise monthly payments?

Higher interest rate, shorter term, or larger asset price each increase P because they raise either r or A, or reduce n.

How accurate are the results?

The math is exact for the given inputs, but taxes, insurance, and fees—usually 5–10 % extra—are outside the scope (IRS Pub. 535, 2023).

Can I compare leasing with buying?

Yes—calculate the lease payment here, then run a loan amortisation schedule; compare total cash outflows including residuals and equity.