Copier Lease Rates to APR Calculator
A common question when looking to lease a copier SHOULD BE: “How does this lease rate factor compute as an APR?” – You may be able to obtain a personal line of credit, but if you are unsure what the comparative interest rate is, it is tough to compare. The bank will do a capital loan, where the copier company may be doing a FMV lease, so the monthly figures may not be a good way to compare which is REALLY the better lease rate for your company.
Here is a crazy formula on how APR is computed using copier numbers we are all used to seeing – Online lease calculator
For those who would like to see what that formula looks like… Here it is – (Basically this is a time value of money equation involving capital equipment…)
Yes, we realize this formula is a challenge for most of us to do. You will hear the copier sales rep, who understands this, tell you that a financial calculator is needed. The equation above is why.
So, the boxes and what they mean. Loan amount is the initial cost of the copier. Residual Value is what you pay at the end to keep the copier, assuming that is what you wanted to do. This generally varies from 7% to 15% of the original amount. A lower number here makes a lower ultimate interest rate.
Monthly payment is what you were quoted. If you were simply given a lease rate factor, say .0194 – the monthly payment would be the loan amount times the copier lease rate factor. In this case, that would be $194.
The calculator provides an interest rate for you so you can compare this rate with line of credit, credit card purchasing, etc.