What is the importance of the 2400 figure used in converting money factor to interest rate, and is it always 2400 regardless of the length of my lease?
A. To convert money factor to annual interest rate, multiply money factor by 2400. To convert annual interest rate to money factor, divide interest rate by 2400. Yes, it’s always 2400, regardless of the length of your lease. The 2400 is just a method of consolidating three other figures to simplify the lease payment formula. It is made up of the number 12 (divisor to convert annual interest to monthly interest), 2 (divisor to calculate the average amount financed), and 100 (divisor to convert a percentage to a decimal) 12 x 2 x 100 = 2400 (for more details, click here).
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