Lease Rate Factor Calculation The interest rate portion of the monthly lease payment relies on the lease rate factor. The lease rate factor is the annual interest rate divided by the number of monthly payments. If the current interest rate is 6 percent, then the lease rate factor in our example is (0.06/60), or 0.0010. One Conversion Rate for Any Money Factor. To find the equivalent interest rate for a money factor, multiply the factor by 2,400. For example, if the money factor is 0.00271, the math gives an interest rate of 6.5 percent. You can also go from an interest rate to a money factor by dividing the rate by the same 2,400. Note: The number used in the conversion from Interest Rate to Money Factor is always 2400 regardless of the length of the lease. Definitions Money Factor – The Money Factor is just another way to represent the Interest Rate, but the Money Factor is used in the lease payment calculation so it's important to either know this information or be able to calculate it if you know the Interest Rate. The lease money factor is not the rental amount the lessee pays but the factor used to determine the interest rate she pays. For example, a lease money factor of 5.4 percent may be applied to a lease, which means the lessee pays a monthly rate of 0.00225. To convert money factors to interest rates, multiply by 2,400. So 0.00125 x 2,400 would equal an interest rate of 3%. 3. Lease term. We recommend leasing for 36 months or less. However, some lease A lease rate factor is the lease payment as a percent of the total cost of the leased equipment or software. Stated another way, if you multiply the lease rate factor by the cost of the leased equipment or software, the result equals the periodic lease payment. The lease money factor is not the rental amount the lessee pays but the factor used to determine the interest rate she pays. For example, a lease money factor of 5.4 percent may be applied to a lease, which means the lessee pays a monthly rate of 0.00225.

6 * 1/2 (for principal) * 1/12 (for monthly) * 1/100 (to convert percentage from 6% to .06) Money factor makes it easier to compute the lease payments manually.

It’s easy enough to do the conversion in either direction. If you already have APR interest rate, simply divide by 2400 to get money factor. Or if you have money factory and want APR interest rate, multiply by 2400. (Yes, it’s always 2400). Example 1 – If you have APR interest rate: 4.5%. Divide by 2400. Money Factor = .001875 Lease Rate Factor Calculation The interest rate portion of the monthly lease payment relies on the lease rate factor. The lease rate factor is the annual interest rate divided by the number of monthly payments. If the current interest rate is 6 percent, then the lease rate factor in our example is (0.06/60), or 0.0010. One Conversion Rate for Any Money Factor. To find the equivalent interest rate for a money factor, multiply the factor by 2,400. For example, if the money factor is 0.00271, the math gives an interest rate of 6.5 percent. You can also go from an interest rate to a money factor by dividing the rate by the same 2,400.

Lease Rate Factor Calculation The interest rate portion of the monthly lease payment relies on the lease rate factor. The lease rate factor is the annual interest rate divided by the number of monthly payments. If the current interest rate is 6 percent, then the lease rate factor in our example is (0.06/60), or 0.0010.

Convert the interest rate to a money factor by dividing it by 2,400. So, a 9 percent interest rate would be a money factor of .00375; Select a 36-month lease term  To convert this to a familiar interest rate, multiply the money factor by 2,400. So, 0.00100 is actually 2.4% APR. Rebates and Fees -- What other amounts will be  The other component determining your lease payment is the money factor. Although it may seem confusing, converting your money factor into APR is simple   The “APR” is the annual percentage rate of interest used in calculating lease payments. It can be converted to a money factor by dividing by 2400. For example, an  For example, a money factor of 0.001 can be converted to an APR of 2.4% (0.001 * 2400). How Can I Calculate My Lease Payments? In order to calculate your  29 Jan 2018 You might think this means the interest rate is 2.25 percent, but it isn't. To convert the money factor to an equivalent annual interest percentage 

The other component determining your lease payment is the money factor. Although it may seem confusing, converting your money factor into APR is simple  

You will then add this amount to your other lease factors to arrive at your total lease payment. If you want to know what the APR% is on your lease, just multiply the money factor by 2,400. For a money factor of 0.0015, the APR% would be 3.6%. This article went into depth about Money Factors, a factor in leasing a new vehicle.

The way to convert a Money Factor into a comparable Interest Rate is to Most " good" leasing Interest Rates are comparable to new car interest rates and in 

29 Jan 2018 You might think this means the interest rate is 2.25 percent, but it isn't. To convert the money factor to an equivalent annual interest percentage  In order to convert money factor into the more understandable APR, simply Of the three factors that contribute to the cost of a lease, only the price of the vehicle   rental payments of $1 psf per year must be discounted at a rate close to Factor (PVIF)2 in finance, or the Gross Income Multiplier as it is called in the USA These conversion figures 0.6 (for a 30 years lease) and 0.8 (for a 60 years lease)  

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