Mar 3, 2020

Calculate Auto Loan Payments

←Older revision Revision as of 05:11, 4 March 2020
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#Use Microsoft Excel to determine the monthly payment.  Fortunately, Microsoft Excel offers several handy functions that will perform complicated calculations for you.<ref>https://ift.tt/2Iey3kH> One of those functions, the PMT function, will calculate your monthly payments based on specifics about your loan.<ref>https://support.office.com/en-us/article/PMT-function-0214da64-9a63-4996-bc20-214433fa6441</ref>[[Image:Calculate Auto Loan Payments Step 10 Version 2.jpg|center]]
 
#Use Microsoft Excel to determine the monthly payment.  Fortunately, Microsoft Excel offers several handy functions that will perform complicated calculations for you.<ref>https://ift.tt/2Iey3kH> One of those functions, the PMT function, will calculate your monthly payments based on specifics about your loan.<ref>https://support.office.com/en-us/article/PMT-function-0214da64-9a63-4996-bc20-214433fa6441</ref>[[Image:Calculate Auto Loan Payments Step 10 Version 2.jpg|center]]
 
#Get the correct information. You'll not only need your loan information, but you'll also need to modify them slightly to get the correct value.[[Image:Calculate Auto Loan Payments Step 11.jpg|center]]
 
#Get the correct information. You'll not only need your loan information, but you'll also need to modify them slightly to get the correct value.[[Image:Calculate Auto Loan Payments Step 11.jpg|center]]
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<ref>https://auto-loan-calculator.net/</ref>[[Image:Calculate Auto Loan Step by Styp 12.jpg|center]]
 
#*Multiply the length of the loan in years by 12. You want to calculate monthly payments, not annual payments, so you'll need the total number of months throughout the life of the loan. For example, if the loan is for four years, then the number of months is 4 * 12, or 48.
 
#*Multiply the length of the loan in years by 12. You want to calculate monthly payments, not annual payments, so you'll need the total number of months throughout the life of the loan. For example, if the loan is for four years, then the number of months is 4 * 12, or 48.
 
#*Since you want to pay off the loan completely, the future value of the loan will be 0. This means that you won't owe any more money at the end of the payment stream.
 
#*Since you want to pay off the loan completely, the future value of the loan will be 0. This means that you won't owe any more money at the end of the payment stream.
#Create headers for your Microsoft Excel spreadsheet. Launch Excel and type these words on the first 4 rows in column A:[[Image:Calculate Auto Loan Payments Step 12.jpg|center]]
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#Create headers for your Microsoft Excel spreadsheet. Launch Excel and type these words on the first 4 rows in column A:[[Image:Calculate Auto Loan Payments Step 13.jpg|center]]
 
#*Rate
 
#*Rate
 
#*Number of Payments
 
#*Number of Payments
 
#*Present Value
 
#*Present Value
 
#*Future Value
 
#*Future Value
#Enter the values that you'll use to calculate your payments. Plug the following numbers in column B next to the descriptions:[[Image:Calculate Auto Loan Payments Step 13.jpg|center]]
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#Enter the values that you'll use to calculate your payments. Plug the following numbers in column B next to the descriptions:[[Image:Calculate Auto Loan Payments Step 14.jpg|center]]
 
#*7.00%
 
#*7.00%
 
#*48
 
#*48
 
#*15,090
 
#*15,090
 
#*0
 
#*0
#Use the Microsoft Excel function to calculate the payment. Input the formula “=PMT(B1/12,B2,B3,B4)” in a cell below the numbers.[[Image:Calculate Auto Loan Payments Step 14.jpg|center]]
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#Use the Microsoft Excel function to calculate the payment. Input the formula “=PMT(B1/12,B2,B3,B4)” in a cell below the numbers.[[Image:Calculate Auto Loan Payments Step 15.jpg|center]]
 
#*Type “=PMT(“ and click on the cell with 7.00% so “B1” appears after the left parentheses.  
 
#*Type “=PMT(“ and click on the cell with 7.00% so “B1” appears after the left parentheses.  
 
#*Type “/12,” (including the comma). Remember, you're dividing by 12 because you're calculating the interest rate on a monthly basis and the interest rate you were given is on an annual basis.
 
#*Type “/12,” (including the comma). Remember, you're dividing by 12 because you're calculating the interest rate on a monthly basis and the interest rate you were given is on an annual basis.
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#*Type a comma after “B3” and click on the cell with 0 to see “B4” appear.   
 
#*Type a comma after “B3” and click on the cell with 0 to see “B4” appear.   
 
#*Type a right parenthesis at the end to complete the formula.  
 
#*Type a right parenthesis at the end to complete the formula.  
#Perform the calculation. Press the “Enter” key and the formula will be replaced with the monthly payment of $361.35.[[Image:Calculate Auto Loan Payments Step 15.jpg|center]]
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#Perform the calculation. Press the “Enter” key and the formula will be replaced with the monthly payment of $361.35.[[Image:Calculate Auto Loan Payments Step 16.jpg|center]]
#Alter the payment.  Change any of the variables, such as the finance amount or number of months, to see how the monthly payment changes.[[Image:Calculate Auto Loan Payments Step 16.jpg|center]]
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#Alter the payment.  Change any of the variables, such as the finance amount or number of months, to see how the monthly payment changes.[[Image:Calculate Auto Loan Payments Step 17.jpg|center]]
#Calculate the loan payment without Excel. If you want to double-check Excel's math or you don't have access to Excel, you can get your loan payment by using one of the many loan payment calculators that are online.<ref>http://www.bankrate.com/calculators/mortgages/loan-calculator.aspx</ref>[[Image:Calculate Auto Loan Payments Step 17.jpg|center]]
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#Calculate the loan payment without Excel. If you want to double-check Excel's math or you don't have access to Excel, you can get your loan payment by using one of the many loan payment calculators that are online.<ref>http://www.bankrate.com/calculators/mortgages/loan-calculator.aspx</ref>[[Image:Calculate Auto Loan Payments Step 18.jpg|center]]
<ref>https://auto-loan-calculator.net/</ref>[[Image:Calculate Auto Loan Step by Styp 17.jpg|center]]
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== Tips ==
 
== Tips ==
 
*Check on the type of interest being charged. In most cases the lender will use the APR, or Annual Percentage Rate, also known as the Stated Rate or Nominal Rate. Effective Interest Rate considers the compounding effect. At 7% compounded monthly, the APR is 7% while the EIR is a higher 7.22%.
 
*Check on the type of interest being charged. In most cases the lender will use the APR, or Annual Percentage Rate, also known as the Stated Rate or Nominal Rate. Effective Interest Rate considers the compounding effect. At 7% compounded monthly, the APR is 7% while the EIR is a higher 7.22%.


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