Compute your Car Loan Monthly Amortization in 10 Seconds
Computation for a Car Loan Monthly Amortization is basically simple interest or PRT (Principal x Rate x Term). I will get to the shortcut computation first then will explain the traditional way of computing for the Monthly Amortization. First, you will be needing the following data: Principal Amount Downpayment Interest Rate Term of Loan Whereas; Principal Amount - The total unit price of the car less discounts and downpayment. Downpayment - The amount you will pay the dealer as your equity or participation to the loan. Regular downpayment is usually pegged at 20% of the Unit Price. Interest Rate - This is simply the interest rate of the loan usually quoted per year (annual) or total interest for the entire term. Example: 6% per annum/year which is equivalent to 30% if term of loan is 5 years (6% x 5) or 18% for a loan with term of 3 years (6% x 3). Term of loan - The duration of the loan expressed either in months or years i.e. 5 years or 60 months. When ...
