The Total Payments calculator computes the sum total of payments on a fixed interest loan including principal and interest over the life of the loan.
INSTRUCTIONS: Choose the preferred currency units and enter the following:
Total Payments: The calculator return the total sum of a all payments on a fixed rate loan in U.S. dollars. However, this can be automatically converted to other currency units via the pull-down menu.
The Total Payment equation lets the user enter the principal (P) amount of a loan, the duration (n) of the loan in years, and the annual interest rate (r %). This formula then calculates the periodic payment (monthly) and multiplies that times the number of payments to calculate the total amount of money paid in principal and interest.
This formula gives the user a sense of how much a purchase requiring financing will actually cost. For example, a home that costs $150,000 with 100% financing at 4% over 30 years, will actually cost $257,803.20. Whereas, a home costing $130,000 with 100% financing at 8% interest over 30 years, will actually cost $343,400.40, $85,597 more!