# Lease Calculator

Lease is a written agreement under which a property owner allows a tenant to use the property for a specified period of time or duration and rent.

## Formula

Step 1: Monthly Depreciation Charge
(CC – RV) / M

Step 2: Monthly Finance Charge
(CC + RV) * MF

Step 3: Total Monthly Charge (plus tax)
(Monthly Depreciation Charge + Monthly Finance Charge) * LST

Where,
MF: The Money Factor. (You can find out what your interest rate is by multiplying the money factor by 2400)
RV: Residual Value. What the car is worth at lease-end.
CC: The Capitalized Cost AKA Sale Price.
LST: Local Sales Tax.
M: Term of the lease (24,36,48,etc)

The property covered in a lease is usually real estate or equipment such as an automobile or machinery. There are two main kinds of leases. A capital lease is long-term and ownership of the asset transfers to the lessee at the end of the lease. An operating lease, on the other hand, is short-term and the lessor retains all rights of ownership at all times.

Examples:
Calculate lease?

Where,
MF: The Money Factor. (You can find out what your interest rate is by multiplying the money factor by 2400) = 0.00186
RV: Residual Value. What the car is worth at lease-end.= 30000
CC: The Capitalized Cost AKA Sale Price. = 50000
LST: Local Sales Tax. = 8.25%
M: Term of the lease (24,36,48,etc) = 36

Solution:
Step 1: Monthly Depreciation Charge
(CC – RV) / M = (50000 – 30000) = 20000/ 36 = 555.555

Step 2: Monthly Finance Charge
(CC + RV) * MF = (50000 + 30000) = 20000 * 0.00186 = 37.2

Step 3: Total Monthly Charge (plus tax)
(Monthly Depreciation Charge + Monthly Finance Charge) * LST = (555.55+37.2) = 592.75 * 1.0825 (8.25% tax) = 641.651