However more manufacturers are sharing the details needed to determine the money factor as well as the residual percentage assumed in the. This simplifies the math of the money factor itself which is a complicated calculation that.
The number used in the conversion from interest rate to money factor is always 2400 regardless of the length of the lease.
How to figure out money factor. You can convert a money factor to a standard percentage interest rate just by multiplying by 2 400. Money factor interest rate 2400. To convert the money factor of a car lease into an understandable figure multiply it by 2 400.
Lease money factor to interest rate. For example you may know that 40 percent of your paycheck will go to taxes and you want to find out how much money that is. In the same vein if the car dealer uses an interest rate.
This process is the reverse of what you did earlier. See our money factor calculator. How to calculate a lease money factor purpose of lease money factor.
In this instance the calculation would be. 10 000 x 1 25 12 500. You divide your percentage by 100.
Firstly the money factor can be converted to the equivalent apr by multiplying by 2 400. To calculate the percentage of a specific number you first convert the percentage number to a decimal. The money factor can be calculated in two ways.
Money factor is always expressed as a very small number such as 00275. For an individual applying for a car lease demonstrating a strong credit score. The lease money factor is sometimes referred to as the lease factor or even just the.
To figure out how much you ll pay back to the mca provider multiply the cash advance amount by the factor rate. Money factor lease charge cc rv x lt we use the money factor in situations where the monthly costs might fluctuate. Money factor calculator since lessors and dealers don t need to publish the money factor as part of advertising a lease or even presenting a custom lease quote this information is often not shared.
To convert to an equivalent annual interest percentage rate apr simply multiply by 2400. Many people confuse a rental s lease money factor with its interest rate. This is entirely on the basis of the remaining worth of an asset.
It will yield the apr of the money factor and is in essence the car lease s apr interest rate. Interest rate money factor 2400. Therefore in our example 00275 multiplied by 2400 yields 6 6 as the equivalent interest apr.