# Lease Calculator

> Find the periodic lease payment for equipment, vehicles or any asset from its value, residual value, term and interest rate, paid in advance or arrears.

Category: Finance · Applies to: Worldwide · Last updated: 2026-10-29
Interactive calculator: https://calculators.geekmidst.com/calculators/lease-calculator

A lease payment repays the part of the asset’s value you use up, plus interest, while the residual value is left over at the end. Most leases are paid in advance, at the start of each month.

Also called: Equipment lease calculator, Lease payment calculator.

## Inputs
- Asset value (default 30000)
- Residual value at the end (default 12000; optional)
- Lease term (unit months; default 36)
- Interest rate (per year) (unit %; default 6)
- Payments made (options: In advance, In arrears; default advance)
- Currency

## Results
- Monthly lease payment
- Total of payments
- Interest (finance cost)
- Residual as % of value

## Formula

```
Payment = (PV − FV × (1 + i)^−n) × i ÷ (1 − (1 + i)^−n), divided by (1 + i) when paid in advance
```

Where:
- PV: asset value
- FV: residual value
- i: monthly rate = annual rate ÷ 12
- n: number of monthly payments

## Worked example
1. i = 6% ÷ 12 = 0.005; (1.005)^−36 = 0.835645.
2. Value to recover: 30,000 − 12,000 × 0.835645 = 19,972.26.
3. Payment in arrears = 19,972.26 × 0.005 ÷ (1 − 0.835645) = 607.59; in advance ÷ 1.005 = $604.57.

**Result:** Leasing a $30,000 asset with a $12,000 residual over 36 months at 6% costs $604.57 a month, with about $3,765 of interest.

## What the result means

The interest figure is the total of payments plus the residual minus the asset value: what the lessor earns for tying up its money. Compare it with the interest on a loan to buy the asset outright.

## Assumptions and limits
- Payments are monthly and level, at a fixed rate.
- At the end you return the asset (or buy it) at exactly the residual value.
- Fees, insurance, maintenance and taxes on the payments are not included.
- Car leases quoted with a money factor are covered by the Auto Lease Calculator.

## Questions

### What does "in advance" mean?

The first payment is due when the lease starts, so each payment covers the month ahead. That makes each payment slightly smaller than paying in arrears at the end of each month.

### How does the residual affect the payment?

A higher residual means you use up less of the asset’s value, so the payment falls; you still pay interest on the residual during the lease, though.

## Related calculators
- [Auto Lease Calculator](https://calculators.geekmidst.com/calculators/auto-lease-calculator)
- [Depreciation Calculator](https://calculators.geekmidst.com/calculators/depreciation-calculator)
- [EMI Calculator](https://calculators.geekmidst.com/calculators/emi-calculator)
- [Business Loan Calculator](https://calculators.geekmidst.com/calculators/business-loan-calculator)

_This calculator gives estimates for planning. It is not financial advice, and lenders’ actual terms, fees and rounding may differ._

Source: GM¹X CalcVerse — https://calculators.geekmidst.com/calculators/lease-calculator