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November 8th, 2012, 08:36 AM   #1
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Auto Finance Formulas

Hello,

I am trying determine the mathematical formulas used in an online auto loan calculator.


The loan calculator is located here, and has 4 different tabs with different calculations:

http://www.cars.com/go/advice/financing ... anCalc.jsp

- "Auto Loan Calculator"
- "Affordability"
- "Cash Back vs. Low Interest"
- "Buy vs. Lease"


I need help figuring out each tabs' formula:

eg.

Monthly Payment = ((vehicle price - (down payment + trade in value)) * sales tax * interest rate) / term months


Any and all help is greatly appreciated.

Best,
Jason
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November 8th, 2012, 09:34 AM   #2
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From: Ottawa Ontario, Canada

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Re: Auto Finance Formulas

*****Once you figure out what you're actually borrowing (the cash that comes out of your wallet!):
Formula:
P = Ai / [1 - 1/(1 + i)^n]
where:
P = payment amount (?)
Givens:
A = amount borrowed *****
n = number of periods (usually months)
i = interest per period (if 9% annual cpd monthly, then .09/12)

That's all you get from me
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