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We financed with honda for a Honda Element, \$26,000 at 7% interest...we were looking at our bill and it says \$317 towards principal and \$143 towards interest, for a total monthly payment of \$460...does that amount of interest sound right to you? because it doesnt sound right to me..I must be doing the math wrong but I dont get this?? please help

Asked by Anonymous at 8:07 PM on Oct. 13, 2009 in Just for Fun

• The interest depends on how much is owed, total. 7% of 26k, divided over the term of the loan.

Answer by Anonymous at 8:17 PM on Oct. 13, 2009

• In this formula for a monthly payment, assume that there is no down payment and that the student must finance the entire price of the car. The formula has a principal, P, interest rate, r, and number of monthly payments, m.

P ( r / 12 )
-------------------------
-m
(1 - ( 1 + r / 12 ) )

For example, a 3 year (36 month) loan of \$15,000 at 7% interest would look like this:

15000 ( 0.07/ 12 )
------------------------------
-36
(1 - ( 1 + 0.07 / 12 ) )

The payment for this car will be \$463.16 per month.

but this is a 36 month formula-- what's the length of your loan? You can plug your info in.

Answer by ecodani at 8:19 PM on Oct. 13, 2009

• I'm awful at math, but I know that the financing offered through car dealerships is often a lot higher than you can get through your bank or credit union.
Go see if you can get a lower rate than you have...
We bought a Jeep Cherokee through the dealership years ago and our payment was \$585 a month. A few weeks later we went to our bank and got it refinanced for \$515 a month.

Answer by 07upsydaisy at 8:27 PM on Oct. 13, 2009

• our loan length is 72 months

Answer by Anonymous at 8:27 PM on Oct. 13, 2009

• 151.67 149.88 148.07 146.26 144.44 142.60 140.76 138.90 137.04 135.16 133.27 131.37

Based on a 69 month loan (26,000 @ 7%) - these are the amortized interest payments starting in November going through October of next year. Your payments and interest are right in line with what they should be.

Answer by PaceMyself at 8:32 PM on Oct. 13, 2009

• Looks like you're financing \$26,981.00 instead of \$26,000.00 even. Or \$27,365.00 at 6.5%.

Calculations could be based on partial percentage of interest, there could be more financed than just the \$26,000 even - and that's my guess, you probably got a little less interest and a little more principal.

Answer by PaceMyself at 8:44 PM on Oct. 13, 2009

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