need help with figuring interest

[Bullshop]

how would I figure the interest on payments?

not sure how to word it --- but just say you want to sell something worth $10,000 and you will carry the loan with a 3% interest - how would I calculate that interest --- like a bank does if they pay more on the principal at times ...? is there a computer program (or something I can get) that would keep track of it for me?

thanks, Tina - BS Mom

[kootne]

Loan Payment Calculator - Quick and easy! | Calculators by CalcXML
www.calcxml.com/calculators/loan-payment-calculator
Googled this, plugged your 10k at 3% for 60 mo. got $180/mo, $781 total interest.
Potential for at lot of grief by being a bank, don't ask how I know. Hope it works for you.
kootne

[Bullshop]

but what about when they pay more toward the principal - how do you adjust the interest? just say their payment is for the $180 a month --- but they pay $300?

[Blammer]

send me an email to vmthtr@charter.net I'll send you a program file that is fill in the blank and it will give you everything.

this will also let you pay "extra" and recalculate all the rest for you.

[popper]

You do have to watch balloon, double down, revolving, other 'principal' payments, they may not be added to the principal in some states. You default and you lose. Kind of an escrow account, interest 'payment' is reduced 'if' the loan is payed off properly. It will also depend on the type of interest in the loan.

[archmaker]

Tina if you have excel it is pretty simple. I can set up a simple spreadsheet for this.

Basically they are paying 3% interest (per year, or .25% per month on the outstanding balance) on the principal of the note. So if you start out 3% @10,000 for 4 years you are talking about $221.34 in payments per month. Basically on the first monthly payment (if made on the same day every month) they are paying $25 in interest the rest goes to reduce the principal, so at the end of the first month the amount they owe you is now $9,803.66. You calculate the interest on the $9,803.66 @ .25% to get the interest.

What happens when they pay extra is that the extra goes to reducing the loan. Instead of paying the $221.34 they decide to pay $250, then the interest for the first month stays the same $25, but the loan is now $9,775.00.

You can setup an excel spreadsheet to calculate the interest expense/income from payment to payment based upon date, and also have in there a field that you put in the payment amount regardless if it is extra.

I can set it up in excel, or if you don't have excel can set it up in Open Office.

Let me know if you want to go this route, and my help. I am assuming you are loaning this to someone and just want to keep it straight, not like you are in the business of doing loans. Otherwise what popper stated is applicable, also I am assuming an unsecured loan and no collateral is being offered in trade, otherwise. . . yeah you get it more paperwork and more redtape.

[williamwaco]

The best way to keep up with a declining balance loan is with a spread sheet program like Excel.