# Money Factor Calculator

## About Money Factor Calculator (Formula)

A Money Factor Calculator is a tool used to determine the cost of leasing a vehicle based on the money factor, which is essentially the interest rate for a lease. The formula for calculating the monthly lease payment using the money factor is as follows:

Monthly Lease Payment = (Net Capitalized Cost + Residual Value) × Money Factor

Where:

• Net Capitalized Cost: This is the negotiated price of the vehicle plus any additional fees or costs, minus any down payment or trade-in value.
• Residual Value: The estimated value of the vehicle at the end of the lease term.
• Money Factor: Similar to an interest rate, it’s a decimal number that represents the cost of financing the lease. To convert it to an equivalent interest rate, multiply it by 2400 (approximate conversion factor).

It’s important to note that the money factor is related to the annual percentage rate (APR) but is not directly comparable. To get the APR from the money factor, multiply it by 2400 and then convert it into a percentage.

Lease payments also depend on other factors like the lease term, mileage allowance, and any incentives or discounts. The formula gives a basic understanding of the monthly cost, but actual lease terms can involve additional fees and taxes that may affect the final payment.