text: # Calculating loans
  
  • Nov 12th 2010, 03:02 AM
  RU091
  Calculating loans
  Hi, I need help about how to calculate loan payments. Can someone show the process of calculating these types of questions?
  
  Suppose I borrow x dollars for y months. The monthly interest rate is z%. I don't start paying until the end of the y months.
  
  1. How do I calculate the total amount I owe at the end of the y months?
  
  2. If I start paying the loan over the next c years, how do I calculate the monthly payment?
  
  Thank you!
  • Nov 12th 2010, 03:52 AM
  let "the total amount I owe at the end of the y months" = A
  Each month, the z% of x is added to x
  
  and
  z% of x = (zx)/100
  
  So A = x + (z% of x)*y
  u will add z% of x, y times to x to give A
  
  I either cannot answer Q2 or not understand it.
  • Nov 12th 2010, 04:05 AM
  Q2
  If i know what you mean,
  you will start paying when y=(c/12)+12 months have passed
  
  we know that A = x + (z% of x)*((c/12)+12 ) when y=(c/12)+12
  so Q2's answer will be A/y (Wondering)
  • Nov 12th 2010, 08:43 AM
  Wilmer
  Quote:
  
  Originally Posted by RU091
  Suppose I borrow x dollars for y months. The monthly interest rate is z%. I don't start paying until the end of the y months.
  
  Why are you complicating something simple?
  Loan of \$x for y months at monthly rate of z% : calculate monthly payment P
  
  i = z/100
  P = xi / [1 - 1/(1+i)^y]
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