Math/Financial Whizes?

[Freakazoid]

Alright at one point I would have been able to do this, but I forget all of my equations and whatnot so I'm at a loss. It's true what they say about the mind, if you don't use it, you lose it :P

Anyways, anyone have even the equation for figuring out how much you're actually paying for a car loan? Let me explain. Alright most/all of you know that dealers prefer to mess around with the monthly payments and not the total cost of the car, something they are surprisingly unwilling to give you, which is why I'm asking this. Say you have a situation like this. You are going to buy a car stickered at say 20,000. You put 5,000 down, and they work the numbers and whatnot, assuming say 7% interest. Picking a random number here, say they say your payments are 300 a month for 60 months. You haggle whatever and they knock the payments down to 275 for 60 months. This is hard for me to explain exactly what I mean but I hope someone can figure me out ;P. Obviously you can multiply 300 *60 and subtract 275*60 to figure out how much you're saving over 60 months. But what if you paid of the loan earlier, then how much would you be saving? It wouldn't be that easy anymore because of the interest.

ANYONE understand what i'm saying or want me to try again? Basically just looking for a formula here, simply put the formula that the car dealers use to figure out your payments. I'm sure with that formula I can tweak it to figure out what I'm looking for.

All I can find is the damn interest calculator for like investing which isn't what I want.

Thanks people :P

[Freakazoid]

Another way to think of it/another equation I'm looking for is... Say in the above situation, where they saved you 25 a month for 60 months. What would be the amount that you 'saved' if you paid off the entire loan immediately? (i.e. having ZERO interest)

[brk_05]

Josh, If you have microsoft excel, most versions have template for loan ammoritization. Using that you could answer all of your questions. If you don't have excel, I'm sure there are some websites that calculate that kind of thing too. just search loan ammoritization.

[Freakazoid]

sweetness thanks brian.

[vannatte]

You've essentially asked a hypothetical question. You cannot accurately predict the exact amount of interest you would pay on an interest-bearing loan for the full term. Interest-bearing loans having interest that accures every day between payments and, unless you pay exactly every 30 days for 5 years, for total amount of interest paid would vary. This is only true on an interest-bearing loan, a precomputed loan calculates all your interest at the beginning of the loan and rebates interest back if you pay it off early. That's a whole nother animal unless you understand the Rule of 78th's. You'll probably only see precomputed loans at finance companies (American General, etc), but you sure as help won't get a 7% rate. To try and answer your question, you'd need to reduce the selling price approximately $1250 to lower your monthly payment by $25 ($20000 at 7% with $5000 down is approx. $321 a month/$18750 at 7% with $5000 down is approx. $295 a month). I hope that helps.