How Do You Calculate APR Monthy Payments?
If you are taking out a loan, one major factor will be affordability of monthly payments. Loan companies and banks will tell you what your monthly payment will be when loan terms are discussed. It is possible to make these calculations yourself if you have the loan terms, such as the principal amount, APR and the length of the loan. This process take about 10 minutes to complete and as few as 3 to 5 minutes to prepare. Here are the steps for how to calculate APR monthly payments. Take the total loan amount and multiply it by the APR. For example, if you have a $60,000 loan with an 8.9 percent APR, multiply $60,000 by 0.089. This example calculation results in $5,340, the total amount of interest for the first year. Divide the APR by the number of times in a year the interest is compounded before multiplying if the interest is compounded more than once a year. For example, an APR of 8.9 percent compounded twice a year results in an interest rate of 4.45 percent, added at the end of each
