someone, please explain the concept of financing....i.e., a car loan

[theNEOone]

say, the amount being borrowed is $16,500 at 2.9%, doesn't it make sense that monthly payments over 60 months are:

(16,500)(1.029) / 60
=$282.97

why would a dealer quote me payments of $320 a month, with the same principal, interest rate, and finance period? he claims that there are "bank fees". i thought the interest WAS the goddamn bank fee. what's going on here? is the dealer being a scheeming a-hole?


=|

 

[Amused]

Originally posted by: theNEOone
say, the amount being borrowed is $16,500 at 2.9%, doesn't it make sense that monthly payments over 60 months are:

(16,500)(1.029) / 60
=$282.97

why would a dealer quote me payments of $320 a month, with the same principal, interest rate, and finance period? he claims that there are "bank fees". i thought the interest WAS the goddamn bank fee. what's going on here? is the dealer being a scheeming a-hole?


=|

Don't get financing through a dealer. Go to your bank.

 

[fredtam]

That is the correct payment Your calculations are wrong.

Enter your contract info here:
http://origin.bankrate.com/brm/auto-loan-calculator.asp

 

[z0mb13]

its not straight interest... I think its compounded or something?

 

[JulesMaximus]

Your calculations are wrong. It has something to do with the present value of money. Did you include tax, title and license fees in the figure $16,500?

 

[fredtam]

Originally posted by: z0mb13
its not straight interest... I think its compounded or something?

exactly. You are paying 2.9 percent a year.

 

[Amused]

Originally posted by: fredtam

Originally posted by: z0mb13
its not straight interest... I think its compounded or something?

exactly. You are paying 2.9 percent a year.

2.9% a year on the remaining principle. So the interest is less and less each month.

 

[z0mb13]

if u ever taken finance, the calculations is like this:

16500 = C times annuity factor of 60 and rate 2.9/12%

Go find C, that is your monthly payments

 

[z0mb13]

Originally posted by: Amused

Originally posted by: fredtam

Originally posted by: z0mb13
its not straight interest... I think its compounded or something?

exactly. You are paying 2.9 percent a year.

2.9% a year on the remaining principle. So the interest is less and less each month.

actually I think its calculated as an annuity.. see my post above

 

[Turkish]

Wow, a lot of misinformed people here. Can't believe all the talk you all having, lol.

Anyways,

0.0024166 = monthy interest rate
periods = 60

16,500 = Payment X [(1/interest rate)-(1/(interest rate(1+interest rate)^number of periods))]

16500
413.7360-357.9463

= $295.75

Thus, your dealership is smokin crack.

 

[Amused]

Originally posted by: z0mb13

Originally posted by: Amused

Originally posted by: fredtam

Originally posted by: z0mb13
its not straight interest... I think its compounded or something?

exactly. You are paying 2.9 percent a year.

2.9% a year on the remaining principle. So the interest is less and less each month.

actually I think its calculated as an annuity.. see my post above

Really? I thought it was compounded monthly.

 

[z0mb13]

ok I just calculated ur monthly payment using my trusty ti83

using the annuity method, ur monthly payment is $295.75 the rest is prolly fees and taxes?

 

[z0mb13]

Originally posted by: XietyCOM
.

dont think it works that way... see my annuity example (well its not annuity, its like 60 months)

 

[z0mb13]

Originally posted by: Amused

Originally posted by: z0mb13

Originally posted by: Amused

Originally posted by: fredtam

Originally posted by: z0mb13
its not straight interest... I think its compounded or something?

exactly. You are paying 2.9 percent a year.

2.9% a year on the remaining principle. So the interest is less and less each month.

actually I think its calculated as an annuity.. see my post above

Really? I thought it was compounded monthly.

er sorry yes its compunded monthly.. what I mean is its callculated LIKE a annuity, but not yearly per se, but monthly (use 60 as the period)

 

[fredtam]

Here is the payment table.

http://home.comcast.net/~fred_tammy/auto-loan-calculator.asp.htm

 

[JulesMaximus]

Google future value of money. That will explain it. Car dealer should have explained it to you but frequently assume you know this already and probably just come across as trying to screw you if they try to explain it to you.

 

[Amused]

Originally posted by: z0mb13
ok I just calculated ur monthly payment using my trusty ti83

using the annuity method, ur monthly payment is $295.75 the rest is prolly fees and taxes?

According to Bankrate.com's autoloan calc, Zomb13 is right on

http://origin.bankrate.com/brm/auto-loan-calculator.asp?unroundedPayment=295.7507314942144&loanAmount=16500.00&nrOfYears=5.00&nrOfMonths=60&interestRate=2.90&startMonth=6&startDay=19&startYear=2004&monthlyPayment=295.75&Submit=Calculate&monthlyAdditional=0&yearlyAdditional=0&yearlyAdditionalMonth=6&oneAdditional=0&oneAdditionalMonth=6&oneAdditionalYear=2004&paidOffDate=Jul+19%2C+2009

I reiterate my original post: Go to the a bank for financing.

 

[fredtam]

Originally posted by: z0mb13

Originally posted by: Amused

Originally posted by: z0mb13

Originally posted by: Amused

Originally posted by: fredtam

Originally posted by: z0mb13
its not straight interest... I think its compounded or something?

exactly. You are paying 2.9 percent a year.

2.9% a year on the remaining principle. So the interest is less and less each month.

actually I think its calculated as an annuity.. see my post above

Really? I thought it was compounded monthly.

er sorry yes its compunded monthly.. what I mean is its callculated LIKE a annuity, but not yearly per se, but monthly (use 60 as the period)

The interest paid will go down monthly (very small increments). 2.9% is the total apr.

 

[z0mb13]

Originally posted by: Amused

Originally posted by: z0mb13
ok I just calculated ur monthly payment using my trusty ti83

using the annuity method, ur monthly payment is $295.75 the rest is prolly fees and taxes?

According to Bankrate.com's autoloan calc, Zomb13 is right on

http://origin.bankrate.com/brm/auto-loan-calculator.asp?unroundedPayment=295.7507314942144&loanAmount=16500.00&nrOfYears=5.00&nrOfMonths=60&interestRate=2.90&startMonth=6&startDay=19&startYear=2004&monthlyPayment=295.75&Submit=Calculate&monthlyAdditional=0&yearlyAdditional=0&yearlyAdditionalMonth=6&oneAdditional=0&oneAdditionalMonth=6&oneAdditionalYear=2004&paidOffDate=Jul+19%2C+2009

I reiterate my original post: Go to the a bank for financing.

yay go me!

well I should get this right since I am a finacial analyst lol... if I cant do this might as well quit

 

[z0mb13]

Originally posted by: fredtam

Originally posted by: z0mb13

Originally posted by: Amused

Originally posted by: z0mb13

Originally posted by: Amused

Originally posted by: fredtam

Originally posted by: z0mb13
its not straight interest... I think its compounded or something?

exactly. You are paying 2.9 percent a year.

2.9% a year on the remaining principle. So the interest is less and less each month.

actually I think its calculated as an annuity.. see my post above

Really? I thought it was compounded monthly.

er sorry yes its compunded monthly.. what I mean is its callculated LIKE a annuity, but not yearly per se, but monthly (use 60 as the period)

The interest paid will go down monthly (very small increments). 2.9% is the total apr.

it doenst work that way... his monthly payment will stay the same..

google annuity present value

 

[Amused]

Originally posted by: z0mb13

Originally posted by: Amused

Originally posted by: z0mb13
ok I just calculated ur monthly payment using my trusty ti83

using the annuity method, ur monthly payment is $295.75 the rest is prolly fees and taxes?

According to Bankrate.com's autoloan calc, Zomb13 is right on

http://origin.bankrate.com/brm/auto-loan-calculator.asp?unroundedPayment=295.7507314942144&loanAmount=16500.00&nrOfYears=5.00&nrOfMonths=60&interestRate=2.90&startMonth=6&startDay=19&startYear=2004&monthlyPayment=295.75&Submit=Calculate&monthlyAdditional=0&yearlyAdditional=0&yearlyAdditionalMonth=6&oneAdditional=0&oneAdditionalMonth=6&oneAdditionalYear=2004&paidOffDate=Jul+19%2C+2009

I reiterate my original post: Go to the a bank for financing.

yay go me!

well I should get this right since I am a finacial analyst lol... if I cant do this might as well quit

:beer:

 

[JulesMaximus]

Originally posted by: Amused
I reiterate my original post: Go to the a bank for financing.

Bank isn't going to give you 2.9%. If you did not include tax title and license in your figure of $16500 then the $320/month sounds about right. If the $16500 is out the door then something isn't right.

 

[fredtam]

I would look at the fees.
Has he tacked on an extended warranty?
When is your first patment due (makes a difference)

 

[fredtam]

Originally posted by: z0mb13

Originally posted by: fredtam

Originally posted by: z0mb13

Originally posted by: Amused

Originally posted by: z0mb13

Originally posted by: Amused

Originally posted by: fredtam

Originally posted by: z0mb13
its not straight interest... I think its compounded or something?

exactly. You are paying 2.9 percent a year.

2.9% a year on the remaining principle. So the interest is less and less each month.

actually I think its calculated as an annuity.. see my post above

Really? I thought it was compounded monthly.

er sorry yes its compunded monthly.. what I mean is its callculated LIKE a annuity, but not yearly per se, but monthly (use 60 as the period)

The interest paid will go down monthly (very small increments). 2.9% is the total apr.

it doenst work that way... his monthly payment will stay the same..

google annuity present value

His payment stays the same but the amount paid in interest does indeed go down.

 

[Turkish]

Originally posted by: XietyCOM
Wow, a lot of misinformed people here. Can't believe all the talk you all having, lol.

Anyways,

0.0024166 = monthy interest rate
periods = 60

16,500 = Payment X [(1/interest rate)-(1/(interest rate(1+interest rate)^number of periods))]

16500
413.7360-357.9463

= $295.75

Thus, your dealership is smokin crack.

:thumbsup: in case you don't see my post between all the crap