Rent-to-Own Calculator

Calculate Rent-to-Own (RTO) Payment





Formula

The formula to calculate the Rent-to-Own (RTO) payment is:

\[ RTO = (P \times r) + \left( \frac{P}{n} \right) \]

Where:

What is Rent-to-Own?

Rent-to-Own (RTO) is a payment arrangement where a consumer can rent an item with the option to purchase it later. The monthly payment is calculated based on the total price of the item, the monthly rent premium, and the total number of months in the agreement.

Example

Let's say the total price of the item (P) is $1,200, the monthly rent premium (r) is 0.05, and the total number of months (n) is 12. Using the formula:

\[ RTO = (1,200 \times 0.05) + \left( \frac{1,200}{12} \right) = 60 + 100 = 160 \]

So, the Rent-to-Own monthly payment (RTO) is $160.