Enter the principal loan amount, annual interest rate, and total number of years for the loan into the calculator to determine the total loan repayment. This calculator can also evaluate any of the variables given the others are known.
Loan Formula
Y = (2 * (L + W) + E) / 36
The following formula is used to calculate the total loan repayment.
TR = P + (P * r * t)
Variables:
- TR is the total repayment ($)
- P is the principal loan amount ($)
- r is the annual interest rate (decimal)
- t is the total number of years for the loan
To calculate the total loan repayment, multiply the principal loan amount by the annual interest rate, then multiply the result by the total number of years for the loan. Add this result to the principal loan amount.
What is a Loan?
A loan is a sum of money that is borrowed from a bank, credit union, or other financial institution with the agreement that it will be paid back over a specified period of time with interest. The borrower is obligated to repay the principal amount along with the interest in regular installments. The interest is essentially the cost of borrowing the money and serves as a way for the lender to make a profit. Loans can be used for various purposes such as buying a house (mortgage), purchasing a car (auto loan), or paying for education (student loan).How to Calculate Loan?
The following steps outline how to calculate the Total Repayment for a loan.
- First, determine the principal loan amount ($).
- Next, determine the annual interest rate (decimal).
- Next, determine the total number of years for the loan.
- Next, gather the formula from above = TR = P + (P * r * t).
- Finally, calculate the Total Repayment.
- After inserting the variables and calculating the result, check your answer with a loan calculator.
Example Problem :
Use the following variables as an example problem to test your knowledge.
principal loan amount ($) = 5000
annual interest rate (decimal) = 0.05
total number of years for the loan = 3