Comments on: how do you figure up your monthly payments of a loan using a calculator?

By: Helmut

Helmut — Tue, 23 Sep 2008 14:54:15 +0000

That’s not a 7th grade problem if you are talking about a real loan with compound interest. You will need a calculator with a x^y key and 1 memory. If you are running Windows 95 or later, your accessory calculator set up as scientific works fine.

let
i = MONTHLY interest ((quoted annual interest) / 12),
P = principle of the loan
n = number of months
p =your payment

then

p = i*P/(1-1/((1+i)^n))

fastest keystroke solution is as follows:
enter annual interest as a decimal.
press /, enter 12, press =, press MS, press +, press 1, press x^y, enter n, press =, press 1/x, press -, press 1, press =, press +/-, press 1/x, press *, press MR, press *, enter P, press =

By: rhsaunders

rhsaunders — Sun, 21 Sep 2008 10:38:13 +0000

Depends on the type of calculator. If you have a financial calculator, such as the HP 12-C, the necesary functions are all built in and all you need to do is to press the buttons. If you have a scientific calculator, you can do it using a procedure which I’ll describe in a moment. If your calculator is a four-banger, it is too difficult to do to be a realistic option.

If you use a scientific calculator, the formula you need is:
Pmt = (i)(P)/(1-exp(-(n)(i))) where Pmt is the monthly payment, i is the interest rate per month, P is the principal, exp is the exponential function, and n is the number of payments. The formula is not quite exact if n is small, but for the usual loan the error is insignificant.

By: Zeina

Zeina — Fri, 19 Sep 2008 09:21:24 +0000

First you need to know what your interest rate is & if it’s constant, decreasing, or increasing. Then you divide your loan amount over the number of months in which you have to completely close it, add the interest rate per month & you’ve got it.