1. How the Rate and Loan Calculator Works
Purpose: This calculator generates monthly payments based on varying interest rates and loan amounts while keeping the loan term (in months) constant.
Formula:
The formula for calculating the monthly payment when you know the loan amount , the monthly interest rate , and the loan term is:
where:
- Â is the loan amount (principal),
- is the monthly interest rate (annual rate divided by 12),
- is the total number of months.
Example:
If we have:
- Loan Amount () = $10,000,
- Annual Interest Rate = 6% (monthly rate = 0.06/12),
- Loan Term () = 36 months,
The monthly payment would be:
So, each row in the table shows how the monthly payment changes with different loan amounts and interest rates.
2. How the Months and Loan Calculator Works
Purpose: This calculator generates monthly payments based on varying loan terms (in months) and loan amounts while keeping the interest rate constant.
Formula:
The formula remains the same:
Here, is constant, and the term changes across columns.
Example:
For:
- Loan Amount () = $5,000,
- Annual Interest Rate = 5% (monthly rate = 0.05/12),
- Loan Terms of 12, 24, and 36 months,
The monthly payments would be:
- 12 months:
- 24 months:
- 36 months:
The table shows how the monthly payment changes with different loan terms.
3. How the Rate and Months Calculator Works
Purpose: This calculator generates monthly payments based on varying interest rates and loan terms while keeping the loan amount constant.
Formula:
Here, Â is constant, and the interest rate and term vary.
Example:
For:
- Loan Amount () = $15,000,
- Interest Rates = 4%, 5%, and 6%,
- Loan Term () = 12, 24, and 36 months,
Sample calculations:
- 4% interest, 24 months:
- 5% interest, 36 months:
- 6% interest, 12 months:
This table illustrates how the monthly payment changes based on various combinations of interest rates and loan terms.