Archive for the ‘Finance Calculations’ Category
Calculator Finance
May 10th, 2005
Question: Tough finance question- Please tell me how the equation should look on a caluclator, thank you!?
Question Details: A local Finance Company quotes a 8 percent interest rate on one-year loans. So, if you borrow $36,000, the interest for the year will be $2,880. Because you must repay a total of $38,880 in one year, the Finance Company requires you to pay $38,880/12, or $3,240, per month over the next 12 months.
(a) This is not really a 8 percent loan. Instead, what is the effective monthly rate?
The correct answer is: 1.20%
Let's denote r as the effective monthly rate you need to find.
From the $36,000 loan and $3,240 monthly payment over the next 12 months, we have
PVA = $36,000 = $3,240 × {(1-[1/(1+r)]12)/r}
Solving on a financial calculator, or by trial and error, gives r = 1.2%
(b) What rate would legally have to be quoted?
The correct answer is: 14.40%
APR = 12 × 1.2% = 14.4%
(c) What is the effective annual rate?
The correct answer is: 15.39%
EAR = 1.01212 - 1 = 15.39%
Answer: I hope you also asked this question n the homework help or math section of this q & a board .
Financial Calculations using a Financial Calculator
Auto Finance Payment Calculator
March 18th, 2005
Question: Which is better, a $2,000 rebate with a standard auto interest rate or 0.9 % finance without the rebate?
I haven't found a good website to find an automobile payment calculator to break this down for me over the entire life of the loan. If you can show me the site or crunch the numbers, I'd appreciate it. Consider a car at $20,000 for five years at 0.9% versus a car at $18,000 for five years at 6%. Thanks!
Answer: It's close, but you will save $7 a month by taking the 0.9% financing instead of the cash back.
I think this is the calculator you have been searching for.
Just click on the 2nd tab, which says "Decision, Low APR vs.Cash Back"
Auto Payment Calculator - Amortization Schedule
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Tags: auto, auto finance payment calculator, calculator, car, finance, loan | 
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