Buying vs. Leasing - Equipment Calculator

Alerts and notices

You can use this calculator to compare the cost of buying versus leasing equipment. 


  • Since the option to buy provides equity in the equipment, the application subtracts this amount from total costs to arrive at the amount in the Net cost field.
  • The calculator determines the ending market value by multiplying the amount in the Residual percent field by the amount in the Purchase price field.
  • The Lost interest on payments field displays the interest that could have been earned if the money spent on the equipment was invested instead.


Field Input
Purchase price $20,000
Sales tax rate 7%
Residual percentage 60%
Buying Leasing
Down payment $1,000 $1,000
Term of loan or lease in months 60 24
Annual interest rate 8%
Monthly payment $424.35
Annual rate of return 8% 8%

In this example, leasing would cost less than buying over the 24 month period in this comparison. The difference between the two options is $922.18.


  • The annual interest rate is the interest rate on the loan used to purchase the equipment.
  • The annual rate of return is the rate of return expected on invested funds.
  • The residual percentage equals the value of the equipment at the end of the lease period.

Copying and pasting loan payment schedules into Excel or other applications

View this procedure to find out how you can copy loan payment schedules into Excel or other applications.

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