Reply to "Calculating Lease Costs and Effective Purchase Price W/O interest"

GIntelMaven

Thanks Montecore,

That makes sense from a business standpoint.

I'm still having a hard time with the math though.

If you are trying to figure out the effective purchase price, but only know the monthly lease payment, # months, and lease rate - do you have any ways to figure out the purchase price?

0.0302 percent of $6,200 is $198 so that only adds up to $6,339. But if you subtract $6,537 by $6,339 then you get $198 again. Suggesting that the purchase price is roughly 2 times the total lease cost. I dont know why.

I tried to prove this theory here:

If you multiply $5.65 x 36 you get roughly $203.

if you double it:

$203x2 = $406

Subtract it from the total lease cost to end user:

$6,537 - $406 = $6,131 - which is darn close to the $6,200 figure, but not quite.

Is there way to work backwards from the lease info (monthly rate, lease rate, # months) to figure this out?

Thanks

12/11/092:20 PM

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