A reader of our blog called in and has a question:
My lease rate factor shows at .0194 – How do I find out the interest rate I am being charged?
That was interesting because I had a lot of trouble finding people who could answer this question.
What you will need:
Loan Amount (How much is being financed)
Residual Value, what you would pay to keep the copier
Monthly Payment
Months of payment.
For given C, P and N, one can only solve the following equation for r by numerical means.
Given the rather smooth behavior of this equation, this calculator employs the Newton-Raphson method with an educated initial guess:
An example we could give would be as follows….
Here is a detailed schedule of payments on this copier:
| Period | Payment | Principal Part | Interest Part | Balance | | 1 | $194.00 | $126.07 | $67.93 | $9,873.93 | | 2 | $194.00 | $126.93 | $67.07 | $9,747.00 | | 3 | $194.00 | $127.79 | $66.21 | $9,619.21 | | 4 | $194.00 | $128.66 | $65.34 | $9,490.55 | | 5 | $194.00 | $129.53 | $64.47 | $9,361.02 | | 6 | $194.00 | $130.41 | $63.59 | $9,230.61 | | 7 | $194.00 | $131.30 | $62.70 | $9,099.31 | | 8 | $194.00 | $132.19 | $61.81 | $8,967.12 | | 9 | $194.00 | $133.09 | $60.91 | $8,834.03 | | 10 | $194.00 | $133.99 | $60.01 | $8,700.04 | | 11 | $194.00 | $134.90 | $59.10 | $8,565.14 | | 12 | $194.00 | $135.82 | $58.18 | $8,429.32 |
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| Period | Payment | Principal Part | Interest Part | Balance | | 13 | $194.00 | $136.74 | $57.26 | $8,292.58 | | 14 | $194.00 | $137.67 | $56.33 | $8,154.91 | | 15 | $194.00 | $138.61 | $55.39 | $8,016.30 | | 16 | $194.00 | $139.55 | $54.45 | $7,876.76 | | 17 | $194.00 | $140.49 | $53.51 | $7,736.26 | | 18 | $194.00 | $141.45 | $52.55 | $7,594.81 | | 19 | $194.00 | $142.41 | $51.59 | $7,452.40 | | 20 | $194.00 | $143.38 | $50.62 | $7,309.03 | | 21 | $194.00 | $144.35 | $49.65 | $7,164.67 | | 22 | $194.00 | $145.33 | $48.67 | $7,019.34 | | 23 | $194.00 | $146.32 | $47.68 | $6,873.02 | | 24 | $194.00 | $147.31 | $46.69 | $6,725.71 |
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| Period | Payment | Principal Part | Interest Part | Balance | | 25 | $194.00 | $148.31 | $45.69 | $6,577.40 | | 26 | $194.00 | $149.32 | $44.68 | $6,428.08 | | 27 | $194.00 | $150.34 | $43.66 | $6,277.74 | | 28 | $194.00 | $151.36 | $42.64 | $6,126.39 | | 29 | $194.00 | $152.38 | $41.62 | $5,974.00 | | 30 | $194.00 | $153.42 | $40.58 | $5,820.58 | | 31 | $194.00 | $154.46 | $39.54 | $5,666.12 | | 32 | $194.00 | $155.51 | $38.49 | $5,510.61 | | 33 | $194.00 | $156.57 | $37.43 | $5,354.04 | | 34 | $194.00 | $157.63 | $36.37 | $5,196.41 | | 35 | $194.00 | $158.70 | $35.30 | $5,037.71 | | 36 | $194.00 | $159.78 | $34.22 | $4,877.93 |
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| Period | Payment | Principal Part | Interest Part | Balance | | 37 | $194.00 | $160.87 | $33.13 | $4,717.06 | | 38 | $194.00 | $161.96 | $32.04 | $4,555.11 | | 39 | $194.00 | $163.06 | $30.94 | $4,392.05 | | 40 | $194.00 | $164.17 | $29.83 | $4,227.88 | | 41 | $194.00 | $165.28 | $28.72 | $4,062.60 | | 42 | $194.00 | $166.40 | $27.60 | $3,896.20 | | 43 | $194.00 | $167.53 | $26.47 | $3,728.66 | | 44 | $194.00 | $168.67 | $25.33 | $3,559.99 | | 45 | $194.00 | $169.82 | $24.18 | $3,390.18 | | 46 | $194.00 | $170.97 | $23.03 | $3,219.20 | | 47 | $194.00 | $172.13 | $21.87 | $3,047.07 | | 48 | $194.00 | $173.30 | $20.70 | $2,873.77 |
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| Period | Payment | Principal Part | Interest Part | Balance | | 49 | $194.00 | $174.48 | $19.52 | $2,699.29 | | 50 | $194.00 | $175.66 | $18.34 | $2,523.63 | | 51 | $194.00 | $176.86 | $17.14 | $2,346.77 | | 52 | $194.00 | $178.06 | $15.94 | $2,168.71 | | 53 | $194.00 | $179.27 | $14.73 | $1,989.44 | | 54 | $194.00 | $180.49 | $13.51 | $1,808.96 | | 55 | $194.00 | $181.71 | $12.29 | $1,627.24 | | 56 | $194.00 | $182.95 | $11.05 | $1,444.30 | | 57 | $194.00 | $184.19 | $9.81 | $1,260.11 | | 58 | $194.00 | $185.44 | $8.56 | $1,074.67 | | 59 | $194.00 | $186.70 | $7.30 | $887.97 | | 60 | $194.00 | $187.97 | $6.03 | $700.00 |
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Make your life easier by asking your copier rep to provide all 4 items so you can compute your copier lease APR!
