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November 8th, 2012, 07:36 AM   #1
Joined: Nov 2012

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Auto Finance Formulas


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: ... anCalc.jsp

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

I need help figuring out each tabs' formula:


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

Any and all help is greatly appreciated.

mcsquared is offline  
November 8th, 2012, 08:34 AM   #2
Math Team
Joined: Oct 2011
From: Ottawa Ontario, Canada

Posts: 14,413
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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!):
P = Ai / [1 - 1/(1 + i)^n]
P = payment amount (?)
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
Denis is offline  

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