[2 days left] What’s wrong with your cloud strategy? Learn why multicloud solutions matter with Nimble Storage.Register Now

x
?
Solved

what formula are they using to calculate loan repayment amounts

Posted on 2014-04-03
4
Medium Priority
?
497 Views
Last Modified: 2014-04-03
Hi

I'm looking at this online calculator and I cant see what formula they are using to calculate the repayments
http://www.carfinance247.co.uk/car-finance/car-finance-calculator.htm

Example 6000 at a flat rate loan over 24 months with interest of 5.6% is

(6000 * 0.056 * 2) + 6000 / 24 gives 278 per month whereas there's is 264. Most car finance companies in the uk are flat rate :( so I was wondering what these guys are using.

The interest rate for each credit rating can easily be seen in the html

The APR isnt of interest at this point

Thanks
0
Comment
Question by:andieje
[X]
Welcome to Experts Exchange

Add your voice to the tech community where 5M+ people just like you are talking about what matters.

  • Help others & share knowledge
  • Earn cash & points
  • Learn & ask questions
  • 2
4 Comments
 
LVL 20

Assisted Solution

by:carlmd
carlmd earned 1000 total points
ID: 39975004
It is doing compound interest using this formula

Monthly payment = [rate + rate / ( (1+rate) ^ months -1) ] x principal loan amount
0
 
LVL 8

Accepted Solution

by:
5teveo earned 1000 total points
ID: 39975019
Excel function generates 264

=PMT(0.056/12,24,6000)


more...

http://www.tvmcalcs.com/tvm/formulas/regular_annuity_formulas
target 'Periodic Payment when PV is known'

=6000/((1-(1/(1+ (0.056/12)) ^ 24) )/(0.056/12))
0
 

Author Comment

by:andieje
ID: 39976800
I tried that function in excel before i posted but it gave me totally the wrong amount. I will double check now. What is the formula that underlies the excel PMT function. I only need to consider the principal, number of payments and interest rate.
0
 

Author Closing Comment

by:andieje
ID: 39976807
Much obliged. Saved me hours of time :)
0

Featured Post

On Demand Webinar - Networking for the Cloud Era

This webinar discusses:
-Common barriers companies experience when moving to the cloud
-How SD-WAN changes the way we look at networks
-Best practices customers should employ moving forward with cloud migration
-What happens behind the scenes of SteelConnect’s one-click button

Question has a verified solution.

If you are experiencing a similar issue, please ask a related question

A Guide to the PMT, FV, IPMT and PPMT Functions In MS Excel we have the PMT, FV, IPMT and PPMT functions, which do a fantastic job for interest rate calculations.  But what if you don't have Excel ? This article is for programmers looking to re…
When we purchase storage, we typically are advertised storage of 500GB, 1TB, 2TB and so on. However, when you actually install it into your computer, your 500GB HDD will actually show up as 465GB. Why? It has to do with the way people and computers…
Although Jacob Bernoulli (1654-1705) has been credited as the creator of "Binomial Distribution Table", Gottfried Leibniz (1646-1716) did his dissertation on the subject in 1666; Leibniz you may recall is the co-inventor of "Calculus" and beat Isaac…
Finds all prime numbers in a range requested and places them in a public primes() array. I've demostrated a template size of 30 (2 * 3 * 5) but larger templates can be built such 210  (2 * 3 * 5 * 7) or 2310  (2 * 3 * 5 * 7 * 11). The larger templa…
Suggested Courses

656 members asked questions and received personalized solutions in the past 7 days.

Join the community of 500,000 technology professionals and ask your questions.

Join & Ask a Question