How to Calculate Monthly Payments on a Motorcycle

So you've found the perfect motorcycle that you want to purchase, and you can see yourself cruising down the road on it. But, as is the case with almost everything, you have to find a way to pay for it. If you don't have the cash to pay for the entire thing, you will probably have to take out a loan. Calculating your monthly payment is important to ensure it fits into your budget.

Instructions

Using a calculator, pen and paper

1

Convert the interest rate on your loan to a decimal by dividing it by 100. For example, if you have a 7 percent interest rate, divide seven by 100 and reach .07.

2

Convert the length of your loan from years into months by multiplying the number of years by 12 months. For example, if you have a four-year loan, multiply four by 12 to get 48 months.

3

Calculate your monthly interest rate by dividing the answer in Step 1 by 12. For an annual interest rate of .07, the monthly rate would be .00583.

4

Add one to your answer in Step 3 and raise it to the negative Pth power, with "P" being the total number of payments determined by Step 2. So you would raise 1.00583 to the (-)48th power, which equals 0.75641.

5

Subtract the answer in Step 4 from 1, which for our example would be 0.24359.

6

Multiply the principal amount of your loan, which is the total amount borrowed, by the answer from Step 3, your monthly interest rate. If you are borrowing $10,000, with our example, this would be 58.333.

7

Divide the answer in Step 6 by the answer in Step 5 to reach your monthly payment, which would be $239.47.

Using MotorcyleFinancingGuide.com

8

Visit MotorcycleFinancingGuide.com.

9

Click the "Calculator" link on the right-hand side of the page. It is the fourth link from the top under "Financing Menu."

10

Type in your loan amount, annual interest rate and term of your loan in years.

11

Click "Calculate," and your monthly payment will appear.