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 |
|
| 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 |
|
| 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 |
|
| 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 |
|
| 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 |
|
Make your life easier by asking your copier rep to provide all 4 items so you can compute your copier lease APR!
