Financing Cost Calculator

This calculator helps you determine the total cost of financing a purchase over time, including interest and fees.

Input Parameters

Calculation Results

Calculation Formula

M = P × [r(1+r)^n]/[(1+r)^n-1]

Where:
M = Monthly Payment
P = Principal Amount
r = Monthly Interest Rate (Annual Rate ÷ 12)
n = Number of Payments (Loan Term × 12)

Total Amount Paid

$0.00

Total Interest Paid

$0.00

Effective Monthly Rate

0.00%

Financing Cost Calculator Calculator Usage Guide

Learn how to use the Financing Cost Calculator and understand its working principles

How to Use This Calculator

  1. Enter the principal amount (the original amount borrowed)
  2. Input the annual interest rate (as a percentage, without the percentage sign)
  3. Specify the loan term in months
  4. Click the "Calculate" button to see the results
  5. The calculator will show your monthly payment, total amount paid, total interest paid, and effective monthly rate

Understanding the Terms

Principal Amount: The original amount of money borrowed.

Annual Interest Rate: The percentage charged by the lender for the use of its money.

Loan Term: The duration of the loan, measured in months.

Monthly Payment: The fixed amount to be paid each month until the loan is fully paid off.

Total Amount Paid: The sum of all monthly payments made over the life of the loan.

Total Interest Paid: The total amount of interest paid over the life of the loan.

Effective Monthly Rate: The actual interest rate considering the compounding effect.

Practical Applications

This calculator can help you:

  • Compare different financing options
  • Understand the true cost of borrowing
  • Plan your budget better
  • Make informed financial decisions