Nope. The part of the formula that determines the finance portion of your monthly payment is (Cap Cost + Residual) x Money Factor. It looks like we’re multiplying the sum of Cap Cost and Residual by an interest rate, but Money Factor is not interest rate, although it can be converted to interest rate. The reason Cap Cost and Residual are added is to facilitate the calculation of average amount financed: (Cap Cost + Residual) / 2 (the divisor 2 is part of Money Factor).  By the way folks, we didn’t invent the formula. It’s used throughout the leasing industry and is perfectly legit.

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