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Calculating the Cost of Your Auto Loan Financial Calculator Principal Loan Amount (PV), APR=%, Time period=N Enter those three elements to get monthly payment (PMT) Monthly payment * Number of payments = Total loan amount Total loan amount – Principal loan amount = Interest paid Total loan amount + Down loan amount = Total purchasing cost Example: Buy and finance a car for $13,500 with an interest rate (APR) of 7% for 7 years. Assume you’re paying sales tax with cash. principal or pv = 13,500 i = 7% n = 6 years or 72 months PMT = $230.16 per month. Total Cost: $16,571.52 Total Interest Paid after 6 years: $3,071.52 Formula for monthly payment: P ( i/12) (1 – (1 + i/12) –n) Use an online calculator: kbb.com http://www.kbb.com/car-loans-and-financing/#calculator Use financial formula in Excel