what formula are they using to calculate loan repayment amounts

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
andiejeAsked:
Who is Participating?
 
5teveoCommented:
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))
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carlmdCommented:
It is doing compound interest using this formula

Monthly payment = [rate + rate / ( (1+rate) ^ months -1) ] x principal loan amount
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andiejeAuthor Commented:
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.
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andiejeAuthor Commented:
Much obliged. Saved me hours of time :)
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