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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 | Ex

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