What is a Rate Factor?

A pricing factor used to calculate a lease payment from the equipment cost.

For example, a lender quotes a rate factor of 0.0215 on a $80,000 equipment lease. Multiplying $80,000 by 0.0215 gives a monthly payment of $1,720 — a simple way for brokers and dealers to quickly calculate lease costs without running a full amortization schedule.

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