Credit & Debt
Total interest paid
Everything paid goes to either the balance or the interest. Subtracting the original balance from the total paid isolates the interest exactly.
The Formula
total interest = P x n - B
Everything paid goes to either the balance or the interest. Subtracting the original balance from the total paid isolates the interest exactly.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| P | Payment | currency | The fixed payment made each month. |
| n | Payments | payments | How many payments are made. |
| B | Balance | currency | The amount outstanding at the start. |
| I | Total interest | currency | The cost of the borrowing over the whole term. |
What Each Symbol Means
Pcurrency
Payment
The fixed payment made each month.
npayments
Payments
How many payments are made.
Bcurrency
Balance
The amount outstanding at the start.
Icurrency
Total interest
The cost of the borrowing over the whole term.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to pay off debt 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 Pay Off Debt, filed under Finance. Every number the guide produces comes from substituting into this one line.