Lease Calculator

A lease is a contractual arrangement where one party (the lessee) pays the owner (the lessor) for the use of an asset for a specified period. Leasing is common for vehicles, equipment, and real estate. The lessee benefits from lower upfront costs and the ability to use the asset without owning it.

The key components of a lease payment include the depreciation cost (the portion of the asset's value consumed during the lease), the finance cost (interest on the leased amount), and any applicable taxes and fees. The money factor is a common way to express the interest rate in a lease.

Leasing can offer tax advantages for businesses, as lease payments are often deductible as operating expenses. At the end of a lease, the lessee typically has the option to purchase the asset at its residual value, return it, or renew the lease.