Solving For Loan Cost Total Use the above formula to determine the total amount you will pay for a loan. Example: If we borrow $100,000 for 10 years at 8 per cent annual percentage rate, what is the total cost of the loan (principal plus interest) ? 1) The rate (r) would be 8 divided by 1,200Note: In the formula, B2 is the annual loan interest rate, B2/12 will get the monthly rate; B3 is the years of the loan, B3 12 will get the total number of periods (months) during the loan; B1 is the total amount of loan; B4 is the first period you pay the bank, while B5 is the last period you pay the = Initial principal or loan amount (in this example, $10,000) r = Interest rate per period (in our example, that's divided by 12 months) n = Total number of payments or periods The formula for calculating your monthly payment is: A = P (r (1+r)^n) ( (1+r)^n -1 ) When you plug in your numbers, it would shake out as this: P = $10,000Excel formula: Calculate payment periods for loan | ExceljetHow to calculate loan payments in 3 easy stepsHow to calculate total interest paid on a loan in Excel?TOTAL LOAN COST FORMULA and CALCULATORThe total amount to be repaid in a loan is a combination of the initial amount borrowed and the total amount of interest to be added, excel can very easily calculate the total amount to be paid using the PMT function. For the PMT function to calculate the entire loan to be repaid three bits of information are required: rate - The interest rate of the loan expressed as a decimal. nper - The number of installments.
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