Loans
Monthly auto loan payment
P is the amount financed, r the monthly rate and n the term in months.
The Formula
M = P x r / (1 - (1 + r)^-n)
P is the amount financed, r the monthly rate and n the term in months.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| P | Amount financed | currency | Price less down payment and trade-in. |
| r | Monthly rate | rate | Annual rate divided by 12. |
| n | Term in months | count | Length of the loan in months. |
What Each Symbol Means
Pcurrency
Amount financed
Price less down payment and trade-in.
rrate
Monthly rate
Annual rate divided by 12.
ncount
Term in months
Length of the loan in months.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate auto loan payment page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate Auto Loan Payment, filed under Finance. Every number the guide produces comes from substituting into this one line.