# Calculating loans

• Nov 12th 2010, 03:02 AM
RU091
Calculating loans
Hi, I need help about how to calculate loan payments. Can someone show the process of calculating these types of questions?

Suppose I borrow x dollars for y months. The monthly interest rate is z%. I don't start paying until the end of the y months.

1. How do I calculate the total amount I owe at the end of the y months?

2. If I start paying the loan over the next c years, how do I calculate the monthly payment?

Thank you!
• Nov 12th 2010, 03:52 AM
let "the total amount I owe at the end of the y months" = A
Each month, the z% of x is added to x

and
z% of x = (zx)/100

So A = x + (z% of x)*y
u will add z% of x, y times to x to give A

I either cannot answer Q2 or not understand it.
• Nov 12th 2010, 04:05 AM
Q2
If i know what you mean,
you will start paying when y=(c/12)+12 months have passed

we know that A = x + (z% of x)*((c/12)+12 ) when y=(c/12)+12
so Q2's answer will be A/y (Wondering)
• Nov 12th 2010, 08:43 AM
Wilmer
Quote:

Originally Posted by RU091
Suppose I borrow x dollars for y months. The monthly interest rate is z%. I don't start paying until the end of the y months.

Why are you complicating something simple?
Loan of \$x for y months at monthly rate of z% : calculate monthly payment P

i = z/100
P = xi / [1 - 1/(1+i)^y]