My Math Forum Car Finance PCP Calculation

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March 6th, 2015, 01:11 AM   #1
Newbie

Joined: Mar 2015
From: UK

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Car Finance PCP Calculation

Hi All,

I am new to this forum.....

I have come across the Car Finance PCP calculation in a website. I have given the example in the attachment. If I calculate the interest, it doesn't match with theirs one. I am puzzled..... Anyone can help please? Thanks in advance.....

Regards,
KMOthpur...
Attached Images
 Car PCP Example1.JPG (33.7 KB, 7 views)

 March 6th, 2015, 08:18 PM #2 Math Team   Joined: Oct 2011 From: Ottawa Ontario, Canada Posts: 14,412 Thanks: 1024 This is what it'll look like, in Bank statement format: Code: MONTH PAYMENT INTEREST BALANCE 00 18,280.00 01 -361.50 87.53 18,006.03 02 -361.50 86.22 17,730.75 ... 29 -361.50 48.32 9,778.73 30 -361.50 46.83 9,464.06 31 45.32 9,509.38 : optional final pay't ====== Total interest: 2,074.38 The 5.9% APR is converted to it's monthly equivalent: (1 + i)^12 = 1.059 i = .004788517365..... 18280 * .004788... = 87.53 (see 1st month's interest above) OK?
 March 9th, 2015, 05:54 AM #3 Newbie   Joined: Mar 2015 From: UK Posts: 3 Thanks: 0 Wow....Excellent..... Thanks a lot Denis... One final question.... How do they calculate 3.04% p.a.???? Regards, kmothpur.
 March 9th, 2015, 06:18 AM #4 Math Team   Joined: Oct 2011 From: Ottawa Ontario, Canada Posts: 14,412 Thanks: 1024 Got no idea why that rate is shown...it is not used. (1+.059/12)^12 = 1.0606 1.0304^2 = 1.0617 Seems to be the semi-annual equivalent rate (or close to) to the 5.9% cpd monthly...but that's a wild guess! Can you ask the car dealer what it means; I'd like to know... You guys in the UK always seem to come up with weird stuff
 March 9th, 2015, 06:46 AM #5 Newbie   Joined: Mar 2015 From: UK Posts: 3 Thanks: 0 .... But sure... I ask them and let you know...... It will take a while but I will post.... Anyway, thanks Denis..... Regards, kmothpur.

 Tags calculation, car, finance, pcp

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