The portion of your base monthly payment that is not depreciation or any amortized amounts. This charge is similar to interest on a loan. The rent charge is usually determined by using a money factor (sometimes called a lease factor). A money factor is a number, often given as a decimal, used by some lessors or assignees to determine the rent charge portion of your monthly payment. It is not a lease rate and cannot be converted to a lease rate by moving the decimal point. The money factor typically is not disclosed to you.

To calculate the average monthly rent charge, the money factor is multiplied by the sum of the adjusted capitalized cost and the residual value. For example, if the money factor is .00354, the adjusted capitalized cost is $18,800, and the residual value is $12,350, the average monthly rent charge is $110.27:

.00354 x ($18,800 + $12,350) =
.00354 x ($31,150) =
$110.27

Example