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Figuring Out Payment

Discussion in 'Business Operations' started by bob, Mar 8, 2003.

  1. bob

    bob LawnSite Platinum Member
    from DE
    Posts: 4,254

    How do figure out a loan payment using a handheld calculator? Principal, intrest, and length (months). Please give an example.
  2. 1st Class Lawns

    1st Class Lawns LawnSite Member
    Posts: 37

    I don't know how to post a link but, do a search for (coastalfcu.org) Coastal Federal Credit Union. Put your mouse on "Mortgage Center" , a drop down menu will appear. Click on mortgage calculator.
    I hope this helps.
    1st Class Lawn Service
  3. bob

    bob LawnSite Platinum Member
    from DE
    Posts: 4,254

    Did you acually read my post?
  4. 1st Class Lawns

    1st Class Lawns LawnSite Member
    Posts: 37

    I did read your post. I guess I couldn't believe what I was reading was true.
    Good luck figuring a amortization schedule on a calculator. That has probably not been done in years.

  5. ABM

    ABM LawnSite Member
    Posts: 15

    Lets say you have a loan for $1000.00 (principle) over 1 year (leangth) at 20% (interest rate).

    Take the interest rate (.20) and divide it by 12 to get the monthly interest rate... .01666666 (for ease we'll call it .016 or 1.6% per month.)

    Multiply the principle amount (1000) by the monthly interest rate (1.6%) to get the monthly interest amount..... $16.00

    Take the principle amount (1000) and divide by 12 to get the principle payment amount..... $83.33

    Take this (83.33) and add the interest amount (16.00) to get your monthly payment... $99.33

    Hope this helps
  6. lsylvain

    lsylvain LawnSite Senior Member
    Posts: 777

    Kay here you go. Trust me this is the right way to do it. (I'm almost a CPA)

    Pmt = Principle / ( ( 1 - ( 1 / ( 1 + (APR / 12))^#months))/(APR/12)


    $10000 Principle
    6% APR
    36 months

    The best way to go about it if figure your monthly rate first
    =.06/12 = .005

    Add 1 to that = 1.005

    raise that to the number of months 1.005^36 = 1.196680525

    then divide 1 by that number 1/1.196680525 = .835644919

    then subtract that # from 1 = 1 - .835644919 = .164355081

    then divide that number by the monthly rate

    .164355081 / .005 = 32.87101624

    Then divide the principle by that number

    10000 / 32.87101624 = 304.23 per month

    hope this helps.

    You could probable also find a chart on the net try searching for
    "present value of an annuity" just divide the principle by the number in the chart.

    Also if you have excel or Works. goto insert:function:financial and there will be a function that calculates your payment for you. Just make sure you use a monthly interest rate and not the yearly or your payment will be astronomical.

    Hope this helps
  7. bob

    bob LawnSite Platinum Member
    from DE
    Posts: 4,254

    I don't understand this sentence.
    Does that mean 1.005 to the 36th power?
    If so , can I do that on a normal calculator?
  8. dougaustreim

    dougaustreim LawnSite Senior Member
    Posts: 488

    Almost every banks web site has a calculator for this as do most home financial software packages.

    When it is so easy to find a computer calculator to do if for you, why make it difficult.

    Austreim Landscaping
  9. bob

    bob LawnSite Platinum Member
    from DE
    Posts: 4,254

    I have no problem finding web sites with built in calculators. I need to figure out some equations in the field. My computer won't reach must past the desk that it sits on!
  10. Jon99

    Jon99 LawnSite Senior Member
    Posts: 375

    Buy yourself a PDA and the software....

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