Calculate the present value of lease payments and generate an amortization schedule for capital (finance) leases. Determine your right-of-use asset value and lease liability under ASC 842 / IFRS 16.
Incremental borrowing rate
Guaranteed residual at end of lease
Present Value (ROU Asset)
$164,355.08
Total Lease Payments
$180,000.00
Total Interest
$15,644.92
| Period | Payment | Interest | Principal | Balance |
|---|---|---|---|---|
| 1 | $5,000.00 | $821.78 | $4,178.22 | $160,176.86 |
| 2 | $5,000.00 | $800.88 | $4,199.12 | $155,977.74 |
| 3 | $5,000.00 | $779.89 | $4,220.11 | $151,757.63 |
| 4 | $5,000.00 | $758.79 | $4,241.21 | $147,516.42 |
| 5 | $5,000.00 | $737.58 | $4,262.42 | $143,254.00 |
| 6 | $5,000.00 | $716.27 | $4,283.73 | $138,970.27 |
| 7 | $5,000.00 | $694.85 | $4,305.15 | $134,665.12 |
| 8 | $5,000.00 | $673.33 | $4,326.67 | $130,338.45 |
| 9 | $5,000.00 | $651.69 | $4,348.31 | $125,990.14 |
| 10 | $5,000.00 | $629.95 | $4,370.05 | $121,620.09 |
| 11 | $5,000.00 | $608.10 | $4,391.90 | $117,228.19 |
| 12 | $5,000.00 | $586.14 | $4,413.86 | $112,814.33 |
| 24 | $5,000.00 | $313.90 | $4,686.10 | $58,094.66 |
| 36 | $5,000.00 | $24.88 | $4,975.12 | $0.00 |
Showing first 12 months and yearly milestones. Total periods: 36.
$180,000.00
Total cost over 3.0 years
Monthly payments spread out
No large upfront outlay
$164,355.08
One-time purchase price
Full ownership immediately
No interest charges
Requires upfront capital
Leasing costs $15,644.92 more (9.5% premium) than buying outright, but preserves your capital for other investments. The right choice depends on your opportunity cost of capital.
Principal (ROU Asset)
$164,355.08
91.3% of total
Total Interest Cost
$15,644.92
8.7% of total
Monthly Payment
$5,000.00
$4,565.42 principal + $434.58 avg interest
Interest Share
8.7%
of total payments
Daily Cost
$166.67
per day of lease
Under modern accounting standards (ASC 842 and IFRS 16), lessees must recognize most leases on the balance sheet. A capital or finance lease creates a right-of-use (ROU) asset equal to the present value of future lease payments. The lease liability is amortized over the lease term, with each payment split between interest expense and principal reduction — similar to a loan. This calculator helps you determine the initial ROU asset value and see how each payment is allocated over the life of the lease.
A capital lease, now called a finance lease under ASC 842, is a lease that transfers substantially all risks and rewards of ownership to the lessee. The lessee records a right-of-use (ROU) asset and a corresponding lease liability on the balance sheet.
The lease liability equals the present value of all future lease payments, discounted at the lessee's incremental borrowing rate (IBR) or the rate implicit in the lease if known. This includes fixed payments and any guaranteed residual value.
The IBR is the rate a lessee would have to pay to borrow on a collateralized basis over a similar term and in a similar economic environment. It's used to discount lease payments when the rate implicit in the lease isn't readily determinable.
Under ASC 842 (US GAAP) and IFRS 16, nearly all leases must be recognized on the balance sheet. Previously, operating leases were off-balance-sheet. Now both finance and operating leases require a right-of-use asset and lease liability, improving financial transparency.
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