# How to figure monthly payments?

**URL:** <https://boards.straightdope.com/t/how-to-figure-monthly-payments/122712>\
**Category:** Factual Questions\
**Created:** [August 7, 2002, 1:36am UTC](https://boards.straightdope.com/t/how-to-figure-monthly-payments/122712 "2002-08-07T01:36:15Z")\
**Posts on this page:** 5\
**Page:** 1

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**Author:** ![liirogue](https://avatars.discourse-cdn.com/v4/letter/l/dbc845/32.png) [@liirogue](https://boards.straightdope.com/u/liirogue)\
**Post date:** [August 7, 2002, 1:36am UTC](https://boards.straightdope.com/t/how-to-figure-monthly-payments/122712/1 "2002-08-07T01:36:15Z")

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Say I’m going to buy a car that costs $16,000… My interest is 21% (Worst case scenario!)  
How can I figure how much a month I will pay on a 5 year loan?

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**Author:** ![Jadis](https://avatars.discourse-cdn.com/v4/letter/j/87869e/32.png) [@Jadis](https://boards.straightdope.com/u/Jadis)\
**Post date:** [August 7, 2002, 1:59am UTC](https://boards.straightdope.com/t/how-to-figure-monthly-payments/122712/2 "2002-08-07T01:59:18Z")

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Googling “auto loan calculator” will give you any number of hits…try [this one](http://www.auto-loan-calculator.com/calc.htm). I plugged in 60 months, 21% interest and came up with $432.85/month and paying $9,971.22 in interest over the life of the loan.

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**Author:** ![brad\_d](https://avatars.discourse-cdn.com/v4/letter/b/50afbb/32.png) [@brad\_d](https://boards.straightdope.com/u/brad_d)\
**Post date:** [August 7, 2002, 2:03am UTC](https://boards.straightdope.com/t/how-to-figure-monthly-payments/122712/3 "2002-08-07T02:03:01Z")

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The equations governing this are shown quite nicely [here](http://www.efunda.com/formulae/finance/loan_calculator.cfm), where they also have calculator scripts so that you can plug in the numbers. For the numbers you give, I get a monthly payment of $432.85.

There are also formulas/calculators present for the other two cases (find interest rate given principal & loan term; find loan term given interest rate & principal).

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**Author:** ![Balthisar](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/balthisar/32/2825_2.png) [@Balthisar](https://boards.straightdope.com/u/Balthisar)\
**Post date:** [August 7, 2002, 11:05am UTC](https://boards.straightdope.com/t/how-to-figure-monthly-payments/122712/4 "2002-08-07T11:05:55Z")

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Excel, easy:

=-PMT(INTEREST/12, NR\_OF\_MONTHS, LOAN-AMOUNT)

If you use cell references, you can easily generate simple side-by-side tables comparing different interest rates, terms, and loan amounts.

Of course, the last payment will be slightly higher or lower based on when you make your first payment as compared to the loan funding date.

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**Author:** ![sailor](https://avatars.discourse-cdn.com/v4/letter/s/a587f6/32.png) [@sailor](https://boards.straightdope.com/u/sailor)\
**Post date:** [August 7, 2002, 11:30am UTC](https://boards.straightdope.com/t/how-to-figure-monthly-payments/122712/5 "2002-08-07T11:30:11Z")

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And financing a car over 5 years at credit card rates has to be one of the worst decisions you can make.