Loans
Total interest over the term
Total payments minus the amount financed is the interest paid.
The Formula
Interest = M x n - P
Total payments minus the amount financed is the interest paid.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| I | Total interest | currency | Cost of borrowing. |
What Each Symbol Means
Icurrency
Total interest
Cost of borrowing.
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.