Assume that there is an $800 difference in the up-front costs of a lease and a finance agreement. If the lease monthly payment is $40 less than the finance agreement monthly payment and the difference is used to pay a credit card debt that is subject to monthly interest of 1.333% (16% APR), the following calculation would be required to incorporate both the difference in up-front costs and the difference in monthly payments.

 

Col. A	Col. B	Col. C	Col. D	Col. E	Col. F
Time period	Initial lease payment difference plus monthly payment difference	Accumulated interest from previous months	Total payment difference plus earnings	Interest saved (Col. D × 1.333%)	End-of-month total savings (D + E)
Beginning	$800.00	0.00	800.00	10.67	810.67
Month 2	$840.00	10.67	850.67	11.34	862.01
Month 3	$880.00	22.01	902.02	12.02	914.03
~	~	~	~	~	~
Month 36

If the interest rate benefit were different in any month, the monthly interest rate multiplier in column E would change for that month. You would have to project the return you would receive on the payment difference over the full term of the lease and financing agreement to accurately include this economic benefit in the model.