Equipment Lease Calculator
Enter the equipment cost, buyout value, term and rate (APR or money factor) to get the lease payment, the total paid and the total if you buy it at the end.
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How to use the Equipment Lease Calculator
- Enter the “Equipment cost ($)”.
- Enter the “Buyout value at end ($)”, R, which is the amount due if you buy the equipment at the end of the lease.
- Enter the “Lease term (months)”, N.
- Under “Rate given as”, choose Annual rate (APR) or Money factor, then type the “Annual rate (APR, %)” or the “Money factor”. The tool converts an APR to a monthly rate, i, by dividing by 12.
- Open More options and enter any “Upfront payment ($)”. The tool subtracts it from the cost to get C.
- With an APR, choose in More options when payments are made: at the end of each month (the default) or at the start of each month.
- Read the “Lease payment”.
- Read “Total of lease payments”, which is the monthly payment multiplied by N.
- Read “Total paid during the lease”, which is the total of payments plus the upfront payment.
- Read the lease charge, which is the total paid minus (cost minus buyout value).
- Read “Total if you buy it at the end”, which is the total paid plus the buyout value.
If you need a record, write the outputs down yourself, and check each input against the lease offer you are reviewing.
What is the formula behind an equipment lease payment?
The rate method sets the monthly payment to (C − R/(1+i)^N) × i / (1 − (1+i)^−N). Here C is the cost minus the upfront payment, R is the buyout value, i is the APR divided by 12, and N is the number of months.
If payments are made in advance, the result is divided by (1+i). This is the annuity-due adjustment. When the APR is 0 %, the formula simplifies to (C − R) / N, which is the amount to cover spread evenly across the term.
How does the money-factor method calculate a lease payment?
The money-factor method sets the payment to (C − R) / N + (C + R) × money factor. The first part spreads the drop in value from cost to buyout value across the term. The second part is a rent charge based on the money factor.
The tool shows the APR as the money factor multiplied by 2400, which is a common approximation rather than an exact conversion. The money-factor formula rests on one source, so treat it as a check on the arithmetic rather than a settled rule.
What is the difference between a finance lease and an operating lease?
According to the biz2credit page, a finance lease lets the lessee buy the equipment at the end and cannot be cancelled. An operating lease is a rental with no transfer of ownership.
The source gives no accounting or tax treatment for either type, and this calculator shows none. Check those questions with a qualified professional before you sign.
How are the lease totals worked out?
The total of payments is the monthly payment multiplied by N. The total paid during the lease adds the upfront payment to that total.
The lease charge is the total paid minus the difference between the cost and the buyout value. The total if you buy at the end is the total paid plus the buyout value. These figures are only as accurate as the inputs you enter.
Why might my result differ from a lease quote?
The quote may use different inputs, such as a different timing for payments, fees the calculator does not include, or a money factor that was not converted the same way. The APR shown for a money factor is only an approximation.
Compare each input line by line before you decide the quote is wrong. The tool reports only what these formulas produce from the numbers you type.
Sources (checked 15 October 2026): openstax.org · num8ers.com · biz2credit.com · openstax.org
Worked examples
| Input | Result |
|---|---|
| Cost $60,000.00, buyout $15,000.00, 36 months | $1,510.14 per month, total with upfront $54,364.91 |
| Cost $60,000.00, buyout $15,000.00, 36 months | $1,500.14 per month, total with upfront $54,004.88 |
| Cost $45,000.00, buyout $28,000.00, 36 months | $654.72 per month, total with upfront $23,570.00 |
| Cost $60,000.00, buyout $12,000.00, 48 months | $1,007.69 per month, total with upfront $58,369.17 |
Calculated by the tool above; open it with the same values to see each step.
Frequently asked questions
Is the equipment lease calculator free to use?
Yes. The tool is free, runs in your browser, and needs no sign-up.
Does the tool upload my numbers anywhere?
The tool runs in your browser, and the figures you type are used for the calculation on your device.
What is the buyout value?
The buyout value is the amount you would pay to buy the equipment at the end of the lease. The tool uses it in the payment formula and in the total if you buy at the end.
What does APR mean in this calculator?
The tool divides the APR by 12 to get a monthly rate, i. If you choose “Money factor” instead, the APR is shown as the money factor multiplied by 2400, which the source calls an approximation.
Can this calculator tell me if a lease is a good deal?
No. The tool calculates the payment and totals from the numbers you enter. It does not judge whether a lease suits your business, and it is not financial or tax advice.
Does the tool show accounting or tax treatment of a lease?
No. The tool shows no accounting or tax treatment for finance or operating leases. Ask a qualified professional about how a lease should be recorded for your business.
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