Loan Calculator

1. Senior Member
Join Date
Dec 1969
Posts
583

Loan Calculator

I need to get the monthly payment from a bunch of numbers, but I am not sure exactly how to write the formula... Heres what I&#039;ll have:<BR><BR>Down Payment ex: 2000<BR>Vehicle Price ex: 15000<BR>Term(yrs) ex: 5(60 months)<BR>Interest Rate(%) 3.99%<BR><BR>What I was thinking was that you take the Down payment and subtract it from the vehicle price, then you divide the Vehicle Price by the term in months:<BR><BR>15000 - 2000 = 13000<BR><BR>13000/60 = 216.67<BR><BR>But i&#039;m not sure what the 3.99% is, what is it 3.99% of exactly?<BR><BR>Does anyone know how to calculate the monthly payment?

2. Senior Member
Join Date
Dec 1969
Posts
296

RE: Loan Calculator

Consider this example, you have taken a loan of \$100 for one year. The interest rate is 3.99%. Then you will have to pay back \$103.99<BR><BR>That is 100 + (100 * (3.99/100) * 1) = 103.99<BR>Formula is Amount to be paid = P+PNR/100<BR><BR>where P = principle, N = Number of years and R = Rate of interest for one year. This is simple interest calculation. <BR><BR>But, to add confusion, you need to check with the client, on how the calculation is made?<BR>what will happen to the interest rate, if the person is paying it back in 4 years instead of 5 years?<BR>Whether the interest is calculated on depreciating principle ?<BR>etc etc etc... Contact the client for more details. The users here will not be able to give you idea or solution on how to write a business logic.

3. Senior Member
Join Date
Dec 1969
Posts
5,955

Yes, interest calculation is a very...

...complex field, since it depends on so many factors. If the person taking out the loan doesn&#039;t pay anything over the term, the calculation is a bit easier than when calculating it for repayments. Also, there is a difference between calculating it daily and monthly, since if the person taking the loan pays in variable amounts as and when she wants, she would benefit from the interest being calculated daily.<BR><BR>As Mani said, check with your client to find out how they want the interest worked out.<BR><BR>Oliver.

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