4/17/2024 0 Comments Simple interest loan calculator![]() After that, compound interest takes off.Ĭopyright ©. Note the two formulas give the same answer for one year. R is the interest rate (expressed as a decimal), and Y is the number of years you invest. Lets say that P is your starting principal (spelled -pal and not -ple, because Your Money is Your Pal), This is true with an interest-only mortgage, for example, where your monthly payments only pay the interest on your loan, but don't pay down the loan itself. The situation where simple interest occurs naturally is when the principal doesn't change over time. You get fixed coupons (that's simple interest) but you can invest them to get interest on them (ergo compound interest). The lesson is that compound interest is a better investment, which seems both obvious and moot - after all, bank accounts always pay compound interest anyway.Įven a bond investment is really compound interest if you think about it: For example, if you know how much you can afford for a monthly payment over a certain number of months and you want to calculate how much money you might afford to borrow, you can enter Interest Rate, # of Payments, and Monthly Payments and click "compute" to calculate what the Principal will be.Compound Interest means that you earn "interest on your interest", while Simple Interest means that you don't - your interest payments stay constant, at a fixed percentage of the original principal.įirst, a calculator to let you see the difference. You can actually use this calculator to estimate any of these pieces by filling in the three known amounts and clicking "compute". ![]() To find the periodic interest rate, you will need to know your payment frequency. Where: r Periodic Interest Rate n Number of Payments. Monthly Payment is the estimated amount of money you will need to pay each month to pay off the loan To calculate your loan payments, you can use a simple loan payment formula that takes into account the loans principal (the amount you borrowed), the loan’s term length, and the interest rate.If you want to borrow $7,500 you would enter 7500 in the Principal blank Principal is the amount of money you want to borrow.For example, if the approximate term of the loan is 4 years or 48 months, you would enter 48 in the # of Payments blank # of Payments is the number of monthly payments you will make to pay off the loan.If the loan rate is 6.5% you would type 6.5 into the Interest Rate blank Simple Loan Amortization Schedule: Payment Date Payment Interest Paid Principal Paid Total Payment Remaining Balance Jan, 2024: 1: 346.88: 732.66: 1,079. Interest Rate is the APR from the loan rate chart.When entering information into the calculator, please use the following guidelines: You can compare information on up to three different Loan Options at one time. Entering Information into the Loan Calculator NOTE: Javascript is required to use the loan calculator. Find out how to use the calculator and what terms you'll need to know. Compare different scenarios and see how they affect your budget and interest cost. If there are no blank fields, the Monthly Payment will be calculated. Use this calculator to estimate your monthly payment and total interest for any loan amount, interest rate and term. To calculate any of these items, simply leave that field blank and press Compute. Amount of money you need to borrow (the principal).This calculator is commonly used to estimate your monthly payment, by filling in the following information and click "compute":
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