# Car Loan Calculator

Contents

1. Loan Amount ($): • Enter the total loan amount in the provided input field. This is the principal amount that you are borrowing. 2. Loan Term: • Enter the loan term as a number, which can be in either months or years. • Select the appropriate unit for the loan term (months or years) using the dropdown menu. 3. Interest Rate (%): • Enter the annual interest rate for the loan in percentage. This should be the nominal annual interest rate provided by the lender. 4. Calculate: • Click the “Calculate” button to compute the monthly payment, total payment, and total interest. 5. Review the Results: • The results will be displayed below the calculation button, showing: • Monthly Payment: The fixed payment amount you need to pay every month. • Total Payment: The total amount paid over the life of the loan (including principal and interest). • Total Interest Paid: The total interest cost over the life of the loan. ### Example • Loan Amount:$20,000
• Loan Term: 5 years (60 months)
• Interest Rate: 3.5%

After entering these values and clicking “Calculate,” the calculator might show:

• Monthly Payment: $363.11 • Total Payment:$21,786.60
• Total Interest Paid: $1,786.60 This indicates that the monthly payment is$363.11, the total amount paid over the 5 years will be $21,786.60, and the total interest paid on the loan will be$1,786.60.

### Formulas Used

1. Monthly Payment:

$M=\frac{P×r}{1-\left(1+r{\right)}^{-n}}$

Where:

• $M$

is the monthly payment

• $P$

is the principal loan amount

• $r$

is the monthly interest rate (annual rate divided by 12)

• $n$

is the total number of payments (loan term in months)

2. Total Payment:

3. Total Interest Paid: