need help calculating to see what percentage loan I have

System

helari wrote: »

I want to have the proper calculations to determine what is a reasonable pay schedule.

The borrower isn't the one who gets to demand that. The lender sets the terms and the overall amount to be repaid, the borrower decides whether they're acceptable or not.

The formula for calculating compound interest is as follows:

A = PMT × (((1 + r/n)^(nt) - 1) ÷ (r/n))
A = the future value of the investment, including interest
PMT = the payment amount per period
r = the annual interest rate (decimal)
n = the number of compounds per period
t = the number of periods the money is invested for
^ means 'to the power of'

And you just use algebra to rearrange that formula to find whatever value above you're looking for such as the payment then for example.
A / (((1 + r/n)^(nt) - 1) ÷ (r/n))=PMT.

Now there is a way that is much easier. Two choices:

1) If you're using EXCEL you can use the RATE function. More here:
https://exceljet.net/formula/calculate-interest-rate-for-loan

Alternatively, use the compound interest calculator on to this website,

https://www.thecalculatorsite.com/finance/calculators/compoundinterestcalculator.php

Select the standard calculator. Put in the amount you're borrowing as the principle sum, enter the interest rate they get on their money for their savings account or wherever they're drawing it from, how many years you'd like to repay it over and set the compound rate to monthly. It'll then show you what the overall amount you'd need to repay your friend over the period you intend to repay will be and at the bottom of the table what the effective annual rate of interest is. You then take that amount final amount, divide it by the number of months (1yr=12, 2yr=24, 3yr=36 etc) and that'll give you your monthly payment.

John_G_Jones

The concept of APR doesn’t mean anything without a defined repayment schedule, so the whole question is flawed.

Edited to add, that’s not quite right; it’s meaningless once you’ve defined the repayment amount, it’d be perfectly possible to agree a 10% APR with no schedule but the total to be repaid would then depend on when payments were made.

foxy-stoat

helari wrote: »

I also have a plan to provide a loan to someone

Based on this alone you probably wont get your return back so the interest you charge will be irrelevant.

[Deleted User]

Hi,

helari wrote: »

I have a 10% loan that is going to take 3 years to pay off.

helari wrote: »

I also have a plan to provide a loan to someone .

Ah, so you are going to borrow money, then resell at a higher interest rate?


Risky. :eek: