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The Car Loan Payment formula computes your monthly payment amount, including principal and interest, on a fixed interest car loan that, like most standard loans, compounds interest monthly. This equation can be used to compute payment amounts for car loans and other standard personal loans.
INSTRUCTIONS: Choose units and enter the following:
- (L) Loan Amount
- (i%) Percent Interest Rate
- (n) Number of Months
- Common Duration: between 36 and 72 months
The Math / Science
This formula is commonly used for auto loans and other simple debt. The word AMORTIZATION comes from the Middle English amortisen which means "to kill". In essence, this is the amount needed on a regular basis "to kill" a debt. The formula for amortized payment is:
MP= P⋅(r12)1-(1+(r12))-12⋅N
where:
- MP = Monthly Payment
- P = Principal Loan Amount
- r = Annual Interest Rate
- N = Number of Years
Personal Finance Calculators
- Monthly Loan Payment: Computes the monthly payment of a fixed interest rate loan (e.g., home mortgage or car loan).
- Credit Card Equation: Computes the number of months to pay off a credit card.
- Mortgage Affordability: Compute the amount of principal one can borrow based on monthly payment, duration and interest rate.
- Leverage Ratio: Calculates a ratio describing debt to income.
- Compound Interest: Computes the compounded interest on a fixed interest rate investment
- CAGR: Computes the compounded annual growth rate achieved on an investment.
- Rule of 72: Provides a quick estimate on time to double an investment
- Simple Interest Earned: Computes a rough estimate on interest earned over time.
- Wage Calculator: Computes the annual, monthly and weekly pay amounts base on hourly wage and hours per week.
- Current Mortgage Rates:
- 30 Year Fixed Interest Rate: 6.92 %
- 15 Year Fixed Interest Rate: 6.37 %
- 7/6 SOFR ARM: [Invalid Constant]
