RCP reverted edits by 223.31.121.62 (talk) to revision #26440388 by Seymour Edits
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#*n: ''Number of Payments''. This is the total number of payments made over the life of the loan. For example, in a three year loan paid monthly n = 3 x 12 = 36.
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#*n: ''Number of Payments''. This is the total number of payments made over the life of the loan. For example, in a three year loan paid monthly n = 3 x 12 = 36.
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#*P: ''Principal''. The amount of the loan is called the principal. This is typically the final price after tax of the asset purchased less any down payment.
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#*P: ''Principal''. The amount of the loan is called the principal. This is typically the final price after tax of the asset purchased less any down payment.
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#Plug your information into the equation. In the above example n = 36, we will use 0.0067% for the monthly interest rate (from an annual 8%), and $3,500 for the principal. So filling this out, Monthly Payment = $3,500*(0.
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#Plug your information into the equation. In the above example n = 36, we will use 0.0067% for the monthly interest rate (from an annual 8%), and $3,500 for the principal. So filling this out, Monthly Payment = $3,500*(0.08(1+0.0067)^36)/((1+0.0067)^36-1). Write out the formula with your numbers even if you feel comfortable working with it. It can eliminate simple math errors.[[Image:Calculate an Installment Loan Payment Step 3 Version 2.jpg|center]]
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#*Solve the parentheses first. Simplify the first part of the equation to $3,500*(0.0067(1.0067)^36)/((1.0067)^36-1).
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#*Solve the parentheses first. Simplify the first part of the equation to $3,500*(0.0067(1.0067)^36)/((1.0067)^36-1).
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#*Handle the exponents. This then becomes $3,500*((.0067(1.272)/(1.272-1))
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#*Handle the exponents. This then becomes $3,500*((.0067(1.272)/(1.272-1))
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