How to Calculate Lease Payments in Excel – 4 Methods

This dataset showcases the Amount Details.

Method 1 – Using a Generic Formula to Calculate Lease Payments in Excel

Example 1 – Calculating Lease Payment When Residual Value Is Given

This is the dataset:

Steps:

• Select the cell where you want to calculate your Adjustable Capitalized Cost. Here, C13.
• In C13 enter the following formula.
`=C5-C6+C7Â `

• Press ENTER to see the result.

Calculate the Depreciation Cost

• Select the cell where you want to calculate your Depreciation Cost. Here, C14.
• Enter the following formula in C14.
`=(C13-C8)/C11`

• Press ENTER to see the Depreciation Cost.

Calculate the Money Factor

• Select the cell where you want the Money Factor. Here, C15.
• Enter the following formula in C15.
`=C9/24`

• Press ENTER to see the Money Factor.

Calculate the Interest

• Select the cell where you want the Interest. Here, C16.
• Enter the following formula in cell C16.
`=(C13+C8)*C15`

• Press ENTER to see the Interest.

Calculate the Tax

• Select the cell where you want the Tax. Here, C17.
• Enter the following formula in cell C17.
`=(C16+C14)*C10`

• Press ENTER to see the result.

Calculate the Monthly Lease Payment.

• Select the cell where you want the Monthly Lease Payment. Here, C18.
• Enter the following formula in C18.
`=C14+C16+C17`

• Press ENTER to see the Monthly Lease Payment.

Example 2 – Calculating the Monthly Lease Payment When Residual Value Is Not Given

This is the dataset:

Steps:

Calculate the Residual Value

• Select the cell where you want to calculate your Residual Value. Here, C12.
• Enter the following formula in C12.
`=C5*C8`

• Press ENTER to see the Residual Value.

Calculate the Depreciation Cost.

• Select the cell where you want to calculate the Depreciation Cost. Here, C13.
• Enter the following formula in C13.
`=(C6-C12)/C10Â `

• Press ENTER to see the Depreciation Cost.

Calculate the Interest

• Select the cell where you want to calculate the Interest. Here, C14.
• Enter the following formula in C14 .
`=(C12+C6)*C7`

• Press ENTER to see theÂ Interest.

Calculate the Total

• Select the cell where you want the Total. Here, C15.
• Enter the following formula in C15.
`=C13+C14`

• Press ENTER to see the result.

Calculate the Tax

• Select the cell where you want to calculate the Tax. Here, C16.
• Enter the following formula in C16.
`=C15*C9`

• Press ENTER.

Calculate the Lease Payment

• Select the cell where you want the Monthly Lease Payment. Here, C17.
• Enter the following formula in C17.
`=C15+C16`

• Press ENTER and see the Monthly Lease Payment.

Method 2 – Using the PMT Function to CalculateÂ  Lease Payments in Excel

This is the dataset:

Steps:

• Select the cell where you want the Monthly Lease Payment. Here, C10.
• Enter the following formula in C10.
`=PMT(C7/12,C8,-C5,C6,0)`

• Â  Press ENTER and see theÂ Monthly Lease Payment.

Read More: How to Calculate Loan Payment in Excel

Method 3 – Applying a Generic Formula to Calculate the Present Value of Lease Payments

This is the dataset:

Calculate the lease Amount after each period

Steps:

• Select the cell where you want to calculate the lease Amount after each period. Here, C10.
• Enter the following formula in C10 .
`=D4`

• Press ENTER and see the result.

Calculate the lease Amount after period 1

• Select the cell where you want to calculate the lease Amount afterÂ period 1. Here, C11.
• Enter the following formula in C11 .
`=C10*\$D\$5+C10`

• Press ENTER.

The lease Amount after each Period is displayed.

Calculate the Present Value.

• Select the cell where you want the Present Value. Here, D10.
• Enter the following formula in D10 .
`=C10/((1+\$D\$6)^B10)`

• Press ENTER.

• Drag the Fill Handle to copy the formula.

The formula is copied to the other cells.

Calculate the Total Lease Amount.

• Select the cell where you want to calculate the Total.
• Enter the following formula in the selected cell.
`=SUM(C10:C13)`

• Press ENTER to see the Total.

Calculate the Total Present Value.

• Select the cell where you want the Total. Here, D14.
• Enter the following formula in D14 .
`=SUM(D10:D13)`

• Press ENTER.

Method 4 – Using the PV Function to Calculate the Present Value of Lease Payments

Steps:

• Insert the lease Amount as shown in Method-03.

Calculate the Present Value of the Lease Payment.

• Select the cell where you want the Present Value. Here, D10.
• Enter the following formula in D10.
`=PV(\$D\$6,B10,0,-C10,0)`

• Press ENTER to see the Present Value.

• Drag the Fill Handle to copy the formula.

The formula returns the Present Value after each Period.

Calculate the Total lease Amount

• Select the cell where you want to calculate the Total.
• Enter the following formula in the selected cell.
`=SUM(C10:C13)`

• Press ENTER to see the Total.

Calculate the Total Present Value.

• Select the cell where you want the Total. Here, D14.
• Enter the following formula in D14.
`=SUM(D10:D13)`

• Press ENTER.

Read More: How to Calculate Car Payment in Excel

Calculate Lease Liability in Excel

This is the dataset:

Calculate the Liability Reduction

Steps:

• Insert 0 as Interest for the first year.

• Select the cell where you want the Liability Reduction. Here, E8.
• Enter the following formula in E8.
`=C8-D8`

.

• Press ENTER to see the Liability Reduction.

• Drag the Fill handle to copy the formula.

The formula is copied to the other cells.

Calculate the Liability Balance

• Select the cell where you want to calculate the Liability Balance.
• Enter the following formula in the selected cell.
`=F7-E8`

• Press ENTER.

• Drag the Fill Handle to copy the formula.

The formula is copied to the other cells.

Calculate the Interest.

• Select the cell where you want to calculate the Interest. Here, D9.
• Enter the following formula in D9.
`=F8*\$D\$4`

• Press ENTER and you will see the Interest.

• Drag the Fill Handle to copy the formula.

The formula is copied to the other cells.

Calculate the Opening Liability Balance

• Select the cell where you want the Opening Liability Balance. Here, F7.
• Go to the Data tab.
• Select What-If Analysis.
• Select Goal Seek from the drop-down menu.

• In the dialog box select the last cell of Liability Balance as Set cell.
• Enter 0 as To value.
• Select the first cell as By changing cell.
• Click OK.

• Click OK in the Goal Seek Status in the dialog box .

Lease Liability was correctly calculated.

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Mashhura Jahan

Mashhura Jahan, BSc in Industrial and Production Engineering from Bangladesh University of Engineering and Technology, invested 1.5 years at ExcelDemy. In roles like Excel & VBA Content Developer, Excel Charts, and Dashboard course trainer, she wrote 90+ articles. She was previously part of the forum support team and a junior software analyst on the Excel Add-in project. With interests spanning Excel, VBA, Power Query, Python, Data Science, and Software Development, Mashhura brings a diverse skill set to her... Read Full Bio

1. Calculate the monthly lease payment with following information – Selling Price Rs 28440, Maintainence and repair for 36 months- 4500 (To be Included in Lease payment 28440+4500), Residual Value 7.5%, interest rate at 20% the lease period of 36 months. how do we calculate the monthly payment in excel?

Fahim Shahriyar Dipto May 3, 2023 at 5:13 PM

To calculate the monthly lease payment in Excel, you can use the following formula:
`=PMT(rate/12,nper,-PV,FV)`
where:
rate = the interest rate per period (in this case, 20% divided by 12 for monthly payments)
nper = the total number of periods (in this case, 36 months)
PV = the present value of the lease (in this case, the selling price plus maintenance and repair costs, or Rs 28440 + Rs 4500 = Rs 32940)
FV = the future value of the lease (in this case, the residual value, or 7.5% of the selling price, or Rs 2133)
In our dataset, in Cell C11 we entered the below formula.
`=PMT(C9/12,C8,(-C6),C7,0)`
See the image for better visualization.

Hope you are able to calculate the monthly lease payment now. Have a nice day. Keep supporting us.
Regards,
Fahim Shahriyar Dipto
Excel and VBA Content Developer

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