How to Use a Simple Interest Calculator to find Your Payment Amount

Knowing how to calculate your interest rate can help you to make a better informed decision when purchasing a big-ticket item. Many websites that offer online applications for loans also offer a payment calculator to help you better understand your options. There are also some free software programs on the web that you can download for your computer. If you know how to use these calculators, you will be able to get a good idea of what your payment will be before you buy.

Instructions

Using the interest calculator

1

By either using a loan calculator or a mortgage loan website, you can easily calculate your interest and monthly mortgage payment. You can also download a program like "Tiny Mortgage Calculator" from the site listed in the Resources below. This will give you an easily accessible simple calculator that you can put on your desktop and use anytime.

2

In the amount box, enter the total amount of the loan before interest.

3

Next, enter the annual interest rate that the bank has offered for your loan.

4

You will also need to input the length of the loan in months. For instance, a four-year loan would be 48 months.

5

The simple interest calculator will then figure the total and give you a monthly payment, yearly payment and total payment over the life of the loan. Knowing your options can save you from accepting a loan payment that may be more than you can handle.