ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -You can calculate the Car Loan EMI Amount with the help of the mathematical formula: EMI Amount = [P x R x (1+R)^N]/[(1+R)^N-1], where P, R, and N are the variables. This also means that the EMI value will change, each time you change any of the three variables.

Detailed explanation-2: -To calculate your monthly car loan payment by hand, divide the total loan and interest amount by the loan term (the number of months you have to repay the loan). For example, the total interest on a $30, 000, 60-month loan at 4% would be $3, 150.

Detailed explanation-3: -Compound interest is calculated by multiplying the initial loan amount, or principal, by the one plus the annual interest rate raised to the number of compound periods minus one. This will leave you with the total sum of the loan including compound interest.

Detailed explanation-4: -Divide your interest rate by the number of monthly payments per year. Multiply the monthly payment by the balance of your loan. The amount you calculate is the interest rate you will pay for your first month’s payment.