Calculating theAuto Cost by 26R2fX

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									Calculating the Cost of Your Auto Loan
Financial Calculator

Principal Loan Amount (PV), APR=%, Time period=N

Enter those three elements to get monthly payment (PMT)

      Monthly payment * Number of payments = Total loan amount

      Total loan amount – Principal loan amount = Interest paid

      Total loan amount + Down loan amount = Total purchasing cost

Example:

      Buy and finance a car for $13,500 with an interest rate (APR) of 7% for 7
      years. Assume you’re paying sales tax with cash.

      principal or pv = 13,500

      i = 7%

      n = 6 years or 72 months

      PMT = $230.16 per month.

      Total Cost: $16,571.52

      Total Interest Paid after 6 years: $3,071.52

Formula for monthly payment:

      P ( i/12)

      (1 – (1 + i/12) –n)

Use an online calculator: kbb.com

      http://www.kbb.com/car-loans-and-financing/#calculator

Use financial formula in Excel

								
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