before calculating the payment on a car loan. dividend the interest amount; by the twelve months, and multiply the monthly interest rate, by your total principal amount Then, multiply the monthly interest amount; by the total, loan term to find the total interest. add- your monthly interest, by your principal monthly payment; to find your total monthly due. so let’s take a look deeply, step by step; at how you can easily; calculate the payment on a car loan.
calculate the payment on a car loan example; one
step; 1
finding the daily interest rate.
let’s say, you bought the BMW, which is worth 50,000 dollars. so first of all, we need to find all the answers; to the questions. your interest rate on the car loan is; 7%. if you divide the seven percent by 365 days you will get the answer f 0.0001917808. because this is the amount; that the lender charges you every day.
step 2 ;
find the daily interest rate for the principal amount, however, to find the daily interest rate on fifty thousand dollars. you must wanna to multiply the; 0.0001917808 by 50,000 dollars Then you will pay the interest of, 9.5890410959$ for fifty thousand dollars.
step 3;
find monthly interest for the principal amount
and if you want to find the monthly: interest amount, that you pay to the car; and loan, then, multiply the daily principal amount interest; 9.5890410959 by 30 days. then, you will get 287.6712328767 dollars per month. this is the amount which you pay every month as an interest.
step 4 ;
find the yearly interest amount for the principal amount.
if you want to find the; how much interest you want to pay every year. then multiply the monthly interest amount of 287.6712328767 dollars by the 12 months. you will get the answer of 3,452.0547945205 dollars.
the step 5 ;
find the total in the interest amount for the full principal loan.
final steps for the interest amount. when you want to find the total interest amount; you’ll pay on your car loan. then multiply the same total year interest amount, 3,452.0547945205 dollars by several years. that you’re going to pay this car loan, let’s 5 years. then, multiply by 5. you will get the answer of; 17,260.273972602 dollars This is the amount, for which you pay the total interest rate.
step 5 .1
find how much monthly payment you make on your principal loan
if you divide the principal; by fifty thousand dollars. by your loan term of sixty months. then, you will get the 833.3333333333 dollars. this is your principal monthly amount.
step 6 ;
find how much you paying the loan with an interest amount.
the principal loan due without interest amount is; 833.3333333333 dollars. if you add- this by monthly interest amount of 287.6712328767 dollars. then, you will get the answer of 1,121.00456621 dollars. this is the monthly due amount; you will pay for the car loan.
step 7 ;
how much you pay with total interest and principal amount.
when you want to find the total paid amount to the lenders. you just need to add- the total interest, and the total principal amount. otherwise, you could not find this. add the total interest of 17,260.273972602 dollars and the principal amount of fifty thousand dollars. then you will finally get the answer of 67,260.273972602 dollars. this is the total amount, you paid to your lenders.
conclusion
when you get the wrong answer for; your loan. then don’t worry. the auto loan interest will work in; two ways. one is fixed interest, and principle. and another one is; compound interest rate.so now you will know how to calculate payment on a car loan.
if you paying the loan, on the second method. then don’t worry. you’re paying the right amount, only with the correct interest rate. we used the fixed interest calculation for the car. however, if you need to know the method of; compound interest, then contact us.