Would somebody give me the formula for figuring payments on $5000.00 at 5 per cent for 48 months? I can't seem to get my brain around it.
Wilma,
There really is not an easy formula to figure equal monthly payments. That is why I cheat. I have a financial calculator at work that gets things right, but if you want a rough method you can use the calculator feature on our web site.
Go to www.mybankcnb.com; click on the calculator feature; click on monthly payments; then fill in the blanks with principal, term, and rate. This is not going to be perfect because it is automatically going to assume 30 days to the first payment and no costs associated with the transaction.
By the way, it says the payment would be $115.15.
Marty
from my high school days, (yes, Myrna, I remember) the formula was I=PRT ;)
And what do each of those letters stand for?
Interest equals Principal times rate times time
I=PRT
got to add to that a bit, altho this should probably be in the "good ole days" catagory. I was just sitting here thinking about my high school business class, and can see Mr. Maginnis standing in front of the class being ever so serious as he drilled formulas and information and figures into our otherwise occupied brains. Marty, suppose probably everything we learned back then is obsolete now, huh? Gosh, even electric adding machines were few and far between, much less calculators to do our figuring. We wouldn't have been allowed to use them anyhow, because it was a standing rule you showed every bit of how you went about getting your final answer IN LONG HAND. ::) ::) Oh, the good old days.............. ;)
Marty, I tried the site and was told it couldn't be displayed.
Flo, that figures the interest for one month. How do you figure the total monthly payment?
I am trying to set up a table like the one Marty mentioned that I can put in the principal, interest rate and number of payments and it gives me an amortization schedule. I had one in an old computer I have that is now at the back of a closet on the bottom and I really don't want to dig it out. Besides I am not sure I can still figure out how to find it. The table that is, not the computer.
Wilma,
I am not sure why it is not displaying. I just tried it again and it came up for me. Happily I got the same payment amount twice.
Figuring interest accrual is very simple. Principal times interest rate divided by 365 days in the year times days to payment. $5000 x .05 / 365 x 30 = $20.55 for the first month.
The harder part is calculating the payment that will be equal for 48 months. That is why I use a financial calculator.
I did go on line and search google on amortization schedule. The best one I found quick was the one at www.bankrate.com. It calculates the payments and then you can go on and it will allow you to print an amortization schedule of payments.
Marty
OK, Marty, I tried it again and found it. I have added it to my favorites so I can find it again when I need it. It gave me the same amount it gave you. Thanks.
If you have Microsoft Works on your computer there are functions in the spread sheet portion that will give you the answer also. It computes the payment to $115.1464679 so it gives the same answer as the bankrate.com has.
Quote from: Marty Hunter on June 28, 2007, 07:40:04 PM
Wilma,
I am not sure why it is not displaying. I just tried it again and it came up for me. Happily I got the same payment amount twice.
Figuring interest accrual is very simple. Principal times interest rate divided by 365 days in the year times days to payment. $5000 x .05 / 365 x 30 = $20.55 for the first month.
The harder part is calculating the payment that will be equal for 48 months. That is why I use a financial calculator.
I did go on line and search google on amortization schedule. The best one I found quick was the one at www.bankrate.com. It calculates the payments and then you can go on and it will allow you to print an amortization schedule of payments.
Marty
First, I want to say that I am glad a banker is the member of our forum.
Second, I want to say that it is great when the banker does a calculation twice and gets the same answer both times. YEAH.
Dee Gee, I have Microsoft Works spreadsheet. What should I look for?
When you have the spreadsheet open, under the menu choice of insert you will find function select it, then select the category of the type of function you want in this case it is PMT select insert this will put it in the cell of the spreadsheet. Now where the Principal you need to change to the amount you are using or you can change it to a cell reference. You will have to the same type of changes to Rate and Term. The Rate is the interest per period of the payment, in the case of monthly payments it would be percentage divided by 12 (.05 / 12).