Capital Lease Calculator
Calculate capital lease payments, present value, and interest expenses. Analyze lease vs. buy decisions for business equipment, vehicles, and property.
Step 1: Lease Parameters
Understanding Capital Leases
A capital lease (or finance lease) is treated as an asset purchase for accounting purposes. The lessee records the asset and liability on the balance sheet and depreciates the asset over its useful life.
Step 2: Calculation Options
Capital Lease Formula
Payment Calculation: PMT = [PV – RV/(1+i)^n] × [i/(1-(1+i)^-n)]
Where: PV = Present Value, RV = Residual Value, i = periodic interest rate, n = number of periods
Capital Lease Calculation Results
Monthly Lease Payment
Lease Amortization Schedule
| Period | Payment | Principal | Interest | Balance |
|---|
Lease vs. Purchase Comparison
Capital Lease Advantages
Accounting: Asset appears on balance sheet
Tax: Interest and depreciation deductions
Cash Flow: Lower initial outlay than purchase
Ownership: Option to purchase at lease end
Operating Lease Advantages
Accounting: Off-balance sheet financing
Flexibility: Easier to upgrade equipment
Maintenance: Often included in lease
Risk: Lessor bears residual value risk
Purchase Advantages
Ownership: Full asset ownership
Equity: Build equity in the asset
Flexibility: No lease restrictions
Cost: May be cheaper long-term
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