Tax refers to the tax amount applied to Depreciation Cost and Interest. Interest = (Adjusted Capitalized Cost – Residual Value)*Money Factor Interest means the interest payments on loans. The Lease Period is the lease contract’s length. Residual Value is the value of the property at the end of the Lease Period. The formula for Depreciation Cost is,ĭepreciation Cost = (Adjusted Capitalized Cost – Residual Value)/Lease PeriodĪdjusted Capitalized Cost is the addition of Negotiated Price with any other dealer fees and Outstanding Loan minus the Down Paymentif there is any. The Depreciation Cost is the loss in value of the property which is spread throughout the lease period. There, are 3 components of a lease payment. It can include different types of properties for a specific time period. For this type of payment, there is an agreed contract between the lessor and the lessee.
Lease payment generally refers to the rental payment.
