Lease Calculator
Lease Calculator
While purchasing an office area or a residential house, an individual should consider between buying a property or taking the property on lease depending on their financial capacity and needs.
How does the Lease Calculator work?
In order to use the Lease Calculator, one should know the following terms:
Value of the asset is the Present Value of the property you want to lease.
Rate of Interest is the interest percentage charged on the asset value.
Number of installments are the total number of monthly lease payments you would pay for the entire lease tenure. For example: If lease tenure is 5 years, then the number of monthly installments would be 5 X 12 months = 60.
Residual Value is the future value of the asset which has depreciated over the time.
Monthly Lease Payment is the regular monthly payment that an individual has to pay to the property owner for the lease.
Total Liability is the total of Principal and Interest.
Formulas:
PMT = PV – FV / [(1+i)^n / (1 – (1 / (1+i)^n / i)]
A = PMT*n
Example:
Assume the cost of the leased asset is Rs 2,00,000. The residual value is Rs 50,000. The rate of interest is 8%. The asset is leased for one year.
PMT = 2,00,000 – 50,000 / (1+0.006667)^12 / (1 – 1/ (1+0.006667)^12 / 0.006667) PMT = Rs 13,381.6
Total Payment = 13381.6 * 12 = Rs. 160579
Why should you use a Lease Calculator online?
Using the Lease Calculator online helps you in making a financial decision on whether to take a property on lease or not? on a real-time basis. Thus, helping you grab an opportunity quickly.
Advantages of using a Lease Calculator:
Listed below are few advantages of using a Lease Calculator:
The Lease Calculator helps you in calculating the residual value, monthly payment and total payment irrespective of the currency denomination, that is, you can use it for calculation of money in INR, USD, JPY, EUR or any currency of your choice.
A Lease Calculator helps you in making decisions quickly that is because you can compare between buying a property or leasing a property on a real time basis.
The Lease Calculator does all the mathematics functions online with few inputs on your end. No coding or doing the maths is needed, this makes it easy to operate.
You can get the monthly lease payments and the total payments for leasing a property instantly, which helps in making a good financial budget.