1. What is the Leasing Payment Formula?

The leasing payment formula calculates the monthly payment amount for a lease agreement. It consists of the principal amount divided by the lease term plus the interest amount.

2. How Does the Calculator Work?

The calculator uses the leasing payment formula:

Where:

• \( Principal \) — Total amount being leased (LKR)
• \( Term \) — Duration of the lease in months
• \( Interest \) — Monthly interest amount (LKR)

Explanation: The formula divides the principal amount equally over the lease term and adds the monthly interest component.

3. Importance of Leasing Calculation

Details: Accurate leasing calculations help both lessors and lessees understand their financial commitments, plan budgets effectively, and make informed decisions about leasing agreements.

4. Using the Calculator

Tips: Enter the principal amount in LKR, lease term in months, and monthly interest amount in LKR. All values must be valid (principal > 0, term ≥ 1, interest ≥ 0).

5. Frequently Asked Questions (FAQ)

Q1: What is included in the principal amount?
A: The principal amount typically includes the cost of the asset being leased minus any down payment or advance payments.

Q2: How is the interest amount determined?
A: The interest amount is usually calculated based on the outstanding balance and the agreed interest rate, which may be fixed or variable.

Q3: Are there other fees included in leasing payments?
A: Depending on the lease agreement, there may be additional fees such as insurance, maintenance, or taxes that are not included in this basic calculation.

Q4: Can this calculator be used for different currencies?
A: While the calculator displays results in LKR, the formula works for any currency as long as all values are in the same currency.

Q5: What happens if I make extra payments?
A: This calculator assumes regular equal payments. Extra payments would reduce the principal faster and potentially change the interest component.