Lease Mathematics

Lease mathematics involve calculating the costs and payments associated with renting an asset, like a vehicle or equipment. Key components include the capitalized cost (the item's price), residual value (estimated worth at lease end), money factor (interest rate), and lease term. The monthly payment combines depreciation (loss in value over the lease period) and interest charges, spread over the term. Discounts, taxes, and fees may also affect the total cost. Understanding these elements helps you evaluate lease options, compare offers, and determine affordability based on predictable monthly payments and overall expenses.