Convert a lease money factor to an interest rate (APR equivalent) by multiplying by 2,400, or convert an interest rate back to a money factor.

Rate ≈ money factor × 2,400. A rough comparison with loan APRs, not the lease’s total cost.

The decimal from your lease, e.g. 0.00250. It is not a percentage.

Optional settings

Interest Rate From Money Factor Formula

The following two example problems outline the steps and information needed to calculate the Interest Rate From Money Factor.

IR = MF × 2,400
  • Where IR is the approximate annual comparison percentage (%), using the money-factor × 2,400 convention
  • MF is the money factor 

For a rough annual rate comparison, multiply the decimal money factor by 2,400; divide the comparison percentage by 2,400 for the reverse calculation. For the standard rent-charge model, monthly rent charge = (adjusted capitalized cost + residual value) × money factor. Use only that charge, not the full monthly payment, for the inverse. Zero is allowed; a zero cost basis cannot determine a unique factor from a zero charge. The USD widget uses exact supplied cents and decimal factors, then rounds modeled rent charges half up to cents; contractual methods and rounding may differ.

Money Factor to Approximate Annual Comparison Percentage
Money Factor Annual comparison rate (%)
0.000100.24
0.000250.60
0.000421.01
0.000501.20
0.000831.99
0.001002.40
0.001253.00
0.001503.60
0.001754.20
0.001904.56
0.002004.80
0.002255.40
0.002506.00
0.002756.60
0.003007.20
0.003257.80
0.003508.40
0.003759.00
0.004009.60
0.0045010.80
* Comparison percentages are rounded to two decimals. Comparison rate (%) ≈ money factor × 2,400. These are not fee-inclusive contractual APRs or effective annual yields.

How to Calculate Interest Rate From Money Factor?

The following example problems outline how to calculate Interest Rate From Money Factor.

Example Problem #1:

  1. First, determine the money factor.
    • The money factor is given as .025.
  2. Finally, calculate the Interest Rate From Money Factor using the equation above: 

IR = MF * 2,400

The values provided above are inserted into the equation below and computed.

IR ≈ 0.025 × 2,400 = 60% annual comparison rate (an arithmetic example, not a market-rate quote)

Example Problem #2: 

For this problem, the variables required are provided below:

money factor = .15

IR ≈ 0.15 × 2,400 = 360% annual comparison rate. This unusually high arithmetic example is not a typical lease quote.

Test your knowledge using the equation and check your answer with the calculator.

IR = MF * 2,400 = ?