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Math Help - Calculating loans

  1. #1
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    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!
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  2. #2
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    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.
    Last edited by zeeshahmad; November 12th 2010 at 03:53 AM. Reason: typing error
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  3. #3
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    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
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  4. #4
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    Quote Originally Posted by RU091 View Post
    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]
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