Finance Calculator

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Finance Calculator
Calculate Monthly Payment
Results:
Monthly Payment: $0.00
Total Interest: $0.00
Total Cost of Loan: $0.00
function calculateFinance(){var p=parseFloat(document.getElementById('loan_amount').value);var r=parseFloat(document.getElementById('interest_rate').value);var t=parseFloat(document.getElementById('loan_term').value);var showSteps=document.getElementById('steps').checked;if(isNaN(p)||isNaN(r)||isNaN(t)||p<=0||t<=0){alert('Please enter valid positive numbers for all fields.');return;}var monthlyRate=r/100/12;var numberOfPayments=t*12;var x=Math.pow(1+monthlyRate,numberOfPayments);var monthlyPayment=(p*x*monthlyRate)/(x-1);var totalCost=monthlyPayment*numberOfPayments;var totalInterest=totalCost-p;document.getElementById('monthlyPaymentValue').innerHTML=monthlyPayment.toLocaleString(undefined,{minimumFractionDigits:2,maximumFractionDigits:2});document.getElementById('totalInterestValue').innerHTML=totalInterest.toLocaleString(undefined,{minimumFractionDigits:2,maximumFractionDigits:2});document.getElementById('totalCostValue').innerHTML=totalCost.toLocaleString(undefined,{minimumFractionDigits:2,maximumFractionDigits:2});if(showSteps){var stepsHtml='Step 1: Convert Annual Rate to Monthly: '+r+'% / 12 = '+(monthlyRate*100).toFixed(4)+'% per month.
';stepsHtml+='Step 2: Calculate Total Payments: '+t+' years * 12 months = '+numberOfPayments+' months.
';stepsHtml+='Step 3: Apply Amortization Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
';stepsHtml+='Result: Monthly Payment is $'+monthlyPayment.toFixed(2);document.getElementById('stepDetails').innerHTML=stepsHtml;document.getElementById('stepDetails').style.display='block';}else{document.getElementById('stepDetails').style.display='none';}}

Calculator Use

This finance calculator is designed to provide comprehensive insights into your loan obligations. By entering the principal amount, interest rate, and term, you can instantly see your monthly payment and the total interest you will pay over the life of the loan. This tool is essential for personal financial planning, whether you are looking at an auto loan, personal loan, or small business financing.

Loan Amount
The total principal amount you intend to borrow. This is the starting balance before interest is applied.
Annual Interest Rate
The yearly percentage rate (APR) charged by the lender. Our finance calculator converts this to a monthly rate for accurate calculation.
Loan Term
The length of time you have to repay the loan, expressed in years. For shorter loans, you can use decimals (e.g., 0.5 for 6 months).

How It Works

Financial institutions typically use an amortization formula to determine fixed monthly payments. This ensure that as you pay down the principal, the amount of interest calculated each month decreases. The formula used by this finance calculator is:

M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]

  • M = Monthly Payment
  • P = Principal Loan Amount
  • i = Monthly Interest Rate (Annual Rate / 12)
  • n = Total Number of Months (Years × 12)

Calculation Example

Example: Suppose you take out a personal loan for $15,000 at a 7% interest rate for a term of 3 years.

Step-by-step solution:

  1. Loan Amount (P) = $15,000
  2. Annual Rate = 7% (Monthly Rate i = 0.07 / 12 = 0.005833)
  3. Term = 3 Years (Months n = 3 * 12 = 36)
  4. Monthly Payment = 15,000 [ 0.005833(1 + 0.005833)^36 ] / [ (1 + 0.005833)^36 – 1 ]
  5. Monthly Payment = $463.16
  6. Total Interest = ($463.16 * 36) – $15,000 = $1,673.76

Common Finance Questions

What is APR vs. Interest Rate?

The interest rate is the cost of borrowing the principal amount. The APR (Annual Percentage Rate) includes the interest rate plus any additional fees or costs associated with the loan, providing a more accurate picture of the total annual cost.

How does the term length affect interest?

A longer term length will result in lower monthly payments, but you will pay significantly more in total interest over the life of the loan. Conversely, a shorter term has higher monthly payments but saves you money on interest.

Can I pay off my loan early?

Most personal loans allow for early repayment, but some lenders charge a "prepayment penalty." Always check your loan agreement to see if extra payments go directly toward the principal, which will reduce the total interest calculated by this finance calculator.

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