Actuarial Method Lease Calculator

The Actuarial Method Lease Calculator allows you to calculate a lease based on distributed payments made on the lease between the amount provided as fund and also to the finance charge in accordance to which a payment is used first to the appended finance charge.

Actuarial Method Lease Calculator
Fair Value of Asset $
Monthly Payment $
Interest Rate %
Number of Payments
Actuarial Method Lease Calculator Results
List of PaymentCapital(b/f) ($)Interest ($)Payment ($)Capital(c/f) ($)
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Actuarial Method for Lease Calculation

Actuarial Method for Lease Calculator. This image provides details of how to calculate Actuarial Method for Lease using a calculator and notepad. By using theActuarial Method for Lease Ratio formula, the Actuarial Method for Lease Calculator provides a calculation of a lease based on distributed payments made on the lease

Have you been leasing a property, or are you planning to lease some equipment needed for your business? In the corporate world, leasing equipment is a very effective financial solution to minimize your risk and keep the show going, by leasing from the banks.

The actuarial method for lease calculation helps you calculate your lease with ease. Businesses do buy their properties or machinery when they are required on urgent basis, but that leads to a lower cash flow for the current period. When a lessee leases assets it is a win-win situation. They get to use the required property or infrastructure but don't have to pay all at once, they typically also get a chance to buy the assets at the end of your leasing period.

The actuarial method for lease calculation helps you evaluate your lease finance charges based on the below mentioned values.

Fair value of asset

"Fair value of asset" refers to the approximate but fair value of the assets a company wants to lease from the bank. This could be a building for company set up, basic infrastructure or some advanced machinery.

Monthly payments

The monthly fixed payment amount that you have to pay.

Interest rate

It stands for the interest rate that the bank is charging you for leasing the required asset.

Number of payments

The number of "how many" months or years the payments would be done.

Lease calculations can be tricky if you try to do them manually. On the other hand, by entering the information detailed above in the calculator, you can have a table of content with just one click and see the detailed calculation of your lease finance charges anytime.

Benefits of using the calculator

Using the actuarial method lease calculator could be really useful, especially for borrowers:

  • It is a very simple tool for a significant calculation. You just have to enter a few details and you will get the results that can help you in many ways.
  • The calculator is online and gives you detailed chart of your lease details.
  • You can use the calculator to compare various schemes offered by different finance companies.
  • The calculator will help you save on your lease and will help you minimize the risk that you might face if you buy the assets via cash.

How does the finance lease work?

The finance leasing structure process can be defined as follows:

  • A company/borrower (lessee) selects an asset .
  • Bank/Finance company (lesser) purchases the asset from the market.
  • The lessee will use the assets during the lease.
  • The lessee pays an installment amount for using the asset during the lease.
  • The lesser will earn interest while also recovering almost all the cost of the asset.
  • The lessee will have the option of purchasing the asset at the end of the lease.

Repayment of lease

Different bank/finance companies offer different schemes and offers for leasing assets. These offers differ in interest rate brackets, repayment terms and repayment methods as well. We all know the lower the interest rate, the better it is for borrowers but in addition to that there is another thing that can save you some money while leasing the asset.

There are two types of repayment options that are generally offered to the borrowers:

First is payment in installments

An accounting period is decided between the lesser and lessee for payment, it can be monthly or yearly. When you pay at the end of the accounting period you are charged interest for the particular period and the next cycle begins.

Second is Advanced payments

The accounting period decisions will be similar, but the repayment will start with an advance payment of the current accounting period, and this way you save the entire interest amount on the last accounting period. For example, if you are leasing a commercial vehicle for 4 years, you will pay the interest for the first 3 years but will not be charged any interest for the 4th year because you will have paid for the entire accounting period in advance.

The actuarial method lease calculator is a helpful tool to make your leasing decisions in a way that can lead to better financial management, saving money, getting things done without having to buy the expensive assets on the spot thus maintaining a decent cash flow which is a main aspect of running a company's operations smoothly, and finally owning the leased assets if required when the lease period ends.