Lending
Loans with a constant amount paid towards Principal
•BALk = remaining balance after time period k.
•CPMT = Constant payment to principal.
•BALk = PV - (k x CPMT)
•Kth payment to interest = i (BALk) = (PMTi)k
•Kth total payment = CPMT + (PMTi)k
Add-On Interest Rate to APR
•r =
•n = number of monthly payments.
•APR = 1200i, where i is the solution in the following equation:
n |
| = | 1 | – (1 + | |
r | i - | ||||
|
| ||||
| 12 |
|
|
|
|
Add-On to APR with Credit Life
•CL = credit life as decimal.
•AMT = loan amount.
•FC = finance charge.
n 1 +
12
n n 2 ⋅
12 12
•
G
•
G ⋅ CL ⋅ n amount of credit life
12
