How to Find a Monthly Car Payment

Many people have to take out a loan when they buy a car. These loans require monthly payments to repay the amount borrowed plus interest. To find the monthly payment, you need to know how long you will have to repay the loan, the interest rate and the amount you borrowed. You can find your monthly car payment using an online calculator (see Resources) or working out the formula by hand.

Instructions

1

Multiply your annual interest rate by 1/12 to find the monthly interest rate on the car loan. For example, if you have an annual rate of 6.126 percent, you would multiply 0.06126 by 1/12 to get 0.005105.

2

Add 1 to your monthly interest rate on your car loan. In this example, you would add 1 to 0.005105 to get 1.005105.

3

Raise the step 2 sum to the power of the negative number of car loan monthly payments you will make. For this example, if you have a 48-month loan, you would raise 1.005105 to the negative 48th power to get 0.783161257.

4

Subtract the step 3 result from 1. In this example, you would take away 0.783161257 from 1 to get 0.216838743.

5

Divide the monthly interest rate on the car loan by the step 4 result. This will be the decimal of the car loan amount that will be the monthly payment. In this example, you would divide 0.005105 by 0.216838743 to get 0.023542841.

6

Multiply the decimal from step 5 by the amount borrowed to find the car loan monthly payment. Completing the example, if your car loan is for $17,000, you would multiply 0.023542841 by $17,000 to find your monthly payment to be $400.23.