Homework Help: What is the car leasing calculation formula

lsepolis123f · Jun 21, 2016

1. The problem statement, all variables and given/known data
// given in JavaScript
var amount = parseInt($('input[name="amount"]').val());
var downpayment = parseInt($('input[name="downpayment"]').val());
var interest = parseInt($('input[name="interest"]').val());
var months = parseInt($("#months").val());

2. Relevant equations
What is the car leasing calculation formula - what must be...? given above... I have to do in JavaScript... but Not know the formula...

3. The attempt at a solution
end result:

months to finish

pay per month amount

???

billy_joule · Jun 21, 2016

Lease? Looks like a hire purchase plan, not a lease.

Do you understand what the variables represent? Have you learnt about compounding interest? If not, what research have you done? What specifically don't you understand?

lsepolis123f · Jun 21, 2016

I just find formulas online but difficult to bring in my case....

Can you tell formula ... suppose 4 vars are in series A, B, C, D....

billy_joule · Jun 21, 2016

lsepolis123f said: ↑

I just find formulas online but difficult to bring in my case....

Can you tell formula ...

No, we don't do your homework for you, That's not how this forum works. We are here to help you learn.
Please read over the homework rules;
https://www.physicsforums.com/threads/guidelines-for-students-and-helpers.686781/
Then answer the questions in post #2.

lsepolis123f · Jun 21, 2016

actually I am web developer and need this for a car dealer site... is Not homework for school....

Mark44 · Jun 21, 2016

lsepolis123f said: ↑

I just find formulas online but difficult to bring in my case....

Show us a couple of the formulas you have found.

Whether this is homework or not, we expect you to put in at least some effort here.

Ray Vickson · Jun 21, 2016

lsepolis123f said: ↑

1. The problem statement, all variables and given/known data
// given in JavaScript
var amount = parseInt($('input[name="amount"]').val());
var downpayment = parseInt($('input[name="downpayment"]').val());
var interest = parseInt($('input[name="interest"]').val());
var months = parseInt($("#months").val());

2. Relevant equations
What is the car leasing calculation formula - what must be...? given above... I have to do in JavaScript... but Not know the formula...

3. The attempt at a solution
end result:

months to finish

pay per month amount

???

If you are GIVEN A (the amount), D the (downpayment), r (the interest rate) and n (the number of months), surely you cannot be asking for (1) months to finish; is that not just n itself, or is there some type of no-payment grace period? As for (2): Google is your friend. The necessary formulas are widely available on-line.

lsepolis123f · Jun 21, 2016

var depreciationFee = (amount - downpayment) / months;
var financeFee = (amount + downpayment) * (interest / 2400);
var result = depreciationFee + financeFee;

Mark44 · Jun 21, 2016

lsepolis123f said: ↑

var depreciationFee = (amount - downpayment) / months;
var financeFee = (amount + downpayment) * (interest / 2400);
var result = depreciationFee + financeFee;

Let's look at some numbers, as hypothetical input values using the variables you have in post #1.
Let:
amount = $10,000
downpayment = $2,000
interest = 10 (%)
months = 36

With the variables you have above, you have depreciationFee would be set to (10,000 - 2,000)/36, or $222.22. This would be the amount financed (10,000 - 2,000) divided by the time in months.
For financeFee, part of the calculation is amount + downpayment, or 10,000 + 2,000 = 12,000. It's not reasonable to charge interest on what they have already paid -- the down payment. In the other part, you have interest/2400. What is the significance of 2400? Are you assuming that the contract length is 24 months? If so, why are you taking months as an input value?

Assuming for the moment that all lease contracts are for 24 months, the calculation for financeFee might be
var financeFee = (amount - downpayment) * (interest/2400);
but this isn't how banks and credit card companies do things, and I don't think car leasing agencies do it this way, either. The problem is that you are calculating the monthly interest rate based on the first payment, the time when the interest is highest. As the finance amount is paid down, the amount of interest is reduced, but your formula isn't taking that into account.

Here's a link to the formula that you should probably be using: https://en.wikipedia.org/wiki/Amortization_calculator#The_formula

lsepolis123f · Jun 21, 2016

Mark44 said: ↑

What is the significance of 2400? Are you assuming that the contract length is 24 months? If so, why are you taking months as an input value?

see here

https://www.sitepoint.com/community...on-what-is-the-formula-in-javascript/227906/2

lsepolis123f · Jun 22, 2016

amount: 11500, downpayment: 1500, interest: 0.07, months: 12, monthly payment = 1259.02
detail.html:871 amount: 11500, downpayment: 1500, interest: 0.07, months: 24, monthly payment = 871.89
detail.html:871 amount: 11500, downpayment: 1500, interest: 0.05, months: 36, monthly payment = 604.34

this is getting in my browser console testing - is it correct,...?

lsepolis123f · Jun 23, 2016

well

Mark44 · Jun 23, 2016

lsepolis123f said: ↑

see here

https://www.sitepoint.com/community...on-what-is-the-formula-in-javascript/227906/2

lsepolis123f said: ↑

amount: 11500, downpayment: 1500, interest: 0.07, months: 12, monthly payment = 1259.02
detail.html:871 amount: 11500, downpayment: 1500, interest: 0.07, months: 24, monthly payment = 871.89
detail.html:871 amount: 11500, downpayment: 1500, interest: 0.05, months: 36, monthly payment = 604.34

this is getting in my browser console testing - is it correct,...?

You have the formulas from the link above, as well as from the page that is linked to in that page. Using a calculator, do you get the same results that you show here?

lsepolis123f · Jun 23, 2016

result are correct... not check with calculator but seems will be the same... can you check last one only result...? anyway this numbers seems OK upper 12 months...?

billy_joule · Jun 23, 2016

lsepolis123f said: ↑

amount: 11500, downpayment: 1500, interest: 0.07, months: 12, monthly payment = 1259.02
this is getting in my browser console testing - is it correct,...?

Nope, however you're calculating your interest is way off, paying back over $15k ($1259.02 * 12) for a one year loan of $10,000 ($11,500 - $1,500) is over 50%, interest, not 7%.

Also, It looks like you're calculating a hire purchase plan, not a lease. To calculate lease payments you need information on the value of the car when the lessee returns the car to the leaser.
https://en.wikipedia.org/wiki/Vehicle_leasing

lsepolis123f · Jun 23, 2016

https://www.sitepoint.com/community...tion-what-is-the-formula-in-javascript/227906

This here ^^^ is correct?? is this>>>>
var depreciationFee = (amount - downpayment) / months;
var financeFee = (amount + downpayment) * (interest / 2400);
var result = depreciationFee + financeFee;

billy_joule · Jun 24, 2016

lsepolis123f said: ↑

https://www.sitepoint.com/community...tion-what-is-the-formula-in-javascript/227906

This here ^^^ is correct?? is this>>>>
var depreciationFee = (amount - downpayment) / months;
var financeFee = (amount + downpayment) * (interest / 2400);
var result = depreciationFee + financeFee;

As post #9 has already explained, this is not correct.
It seems like you don't understand how a lease works or what your variables represent. Success is very unlikely if you aren't willing to do some research and study.
Can you answer the questions in post #2?

lsepolis123f · Jun 25, 2016

billy_joule said: ↑

As post #9 has already explained, this is not correct.
It seems like you don't understand how a lease works or what your variables represent. Success is very unlikely if you aren't willing to do some research and study.
Can you answer the questions in post #2?

sitepoint forum say IS CORRECT... I am web developer i know little about this can you tell correct formula to finish??

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Homework Help: What is the car leasing calculation formula

lsepolis123f

billy_joule

lsepolis123f

billy_joule

lsepolis123f

Mark44

Staff: Mentor

Ray Vickson

lsepolis123f

Mark44

Staff: Mentor

lsepolis123f

lsepolis123f

lsepolis123f

Mark44

Staff: Mentor

lsepolis123f

billy_joule

lsepolis123f

billy_joule

lsepolis123f