where

PMT is the amount of each periodic payment. (Note that it is a negative value in the Excel formula; think of it as negative because the cash is leaving you.)
rate is the interest rate driving the periodic payment. (Note that it must reflect the frequency of payment—so rate for a monthly payment would be the annual interest rate divided by 12.)
nper is the number of periodic payments in the lease transaction.
pv is the initial cost of equipment in the lease.
fv is the expected residual value of the equipment at the end of the lease term. (Note that fv is also a negative value in the Excel PMT formula.)
type is determined by whether payments are made in advance or arrears. (If the payment period is monthly, an advance payment for January would be due on January 1, while an arrears payment would be due January 31.)

Here's how the calculation would work. Suppose you were looking to lease a forklift and a prospective lessor gave you a bid with these features:

To determine whether this is a good deal, you can back into the missing numbers.

Instant Insights /

Equipment Leasing: The Good, the Bad, and the Ugly