How do I calculate my loan repayment costs?

How do I calculate my loan repayment costs?

To calculate your loan repayment costs, you'll need the loan amount, interest rate, and loan term. Do you have those details?

Yes, I have a loan amount of $10,000, an interest rate of 5%, and a term of 3 years.

Great! You can use the formula: M = P[r(1+r)^n] / [(1+r)^n – 1], where M is the monthly payment, P is the loan amount, r is the monthly interest rate, and n is the number of payments.

Can you help me calculate it step by step?

Sure! First, convert the annual interest rate to a monthly rate by dividing by 12. So, 5% becomes 0.004167. Next, calculate n, which is 3 years times 12 months, giving you 36 payments.

Okay, I have that. What’s next?

Now plug those values into the formula. M = 10000[0.004167(1+0.004167)^36] / [(1+0.004167)^36 – 1]. Let me calculate that for you.