New Car Finance - Math Help?
I think I'm having a blonde moment because I've done the maths and if I'm right this seems ridiculous to me. So I was hoping some maths whiz could help me out by working this out for me.
I am in the process of looking for a new car and I got a quote the other day from a dealer.
£163.21 per month over 60 months which works out at £9792.60
This is on the basis of borrowing £6995 on finance...
I was hoping someone could help me work out the % because £6995 over 60 months is £116.58 per month which means I'm paying £46.63 a month on finance alone.
So can anybody help me with the maths and working out the % of finance?
- Anonymous1 decade agoFavorite Answer
Actually, the nominal annual interest rate compounded MONTHLY is 12 * 1.18% = 14.16%. 15.12% would be the nominal annual interest rate compounded ANNUALLY, also known as the annual effective interest rate. Of course, like all math, this means nothing to most people since math doesn't apply well to real life. I blame it on the crappy math education in the USA.Source(s): BS in math
- sarrattLv 43 years ago
You can not anticipate that there's simply the only style of mortgage. Reading the agreement might specify what you'll and can't do and considering there is all type of special agreements you can pass into, your query is inconceivable to reply.. RE: Car financing query??? - Lets say a vehicle bills $five,000 and the trader goes to finance a vehicle mortgage for you with an curiosity price of 24%. If you pay the per 30 days vehicle notice each month for 60 months, you're going to have paid approximately $eight,000 this means that $three,000 of that's curiosity. Lets say your per 30 days notice is $one hundred thirty however a few months you pay $500......will that shrink the quantity of curiosity you pay subsequently? I bet to sum all of it up I am asking: If you pay your vehicle mortgage off faster than the 60 months, will the curiosity be much less?
- nyc_kidLv 71 decade ago
Using my financial calculator I get that your financial cost per month is 1.18% which is equal (compounded monthly) to be 15.12% annually.
Therefore, at the end of the first month your payment of 163.21 consists of:
82.54 (1.18% of 6995) interest (not 46.63 as you state) and 80.67 of principal payment.
At the end of your second month your interest payment will be 1.18%
of ( 6995 - 80.67) = 81.59 etc.
Indeed total interest payment over 60 months amounts to 2797.60.
Good luck and enjoy your car.
- 1 decade ago
Go to GOOGLE or any other search engine you care to use and type in calculate car payment. You should be able to get all the information you need.