Hire Purchase Interest

Hire Purchase Interest

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Good Day Everyone,

There is alot of loan calculator that i can find online, however all does not calculate correctly on the interest to be pay.

Below is my question:

Cost of Vehicle: $347,800

Deposit Paid: $52,800

Balance to pay: $295,000

1.88% Interest for 6 years = $33,276

Total Hire Purchase: $328,276

$4,560 installment to be pay for 71 mths

$4,516 installment to be pay for the last mth

How do i calculate the interest to pay for each month?

Thank you!

Replies (3)

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By User deleted
04th Jun 2015 10:44

Don't be so lazy
http://bfy.tw/AOZ

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By johngroganjga
04th Jun 2015 10:54

The interest is included in the amounts you pay, which you set out above.

But is your question perhaps how do you calculate the amount of interest that is included in each payment, for accounting purposes, rather than the one you asked?

The answer is that you set it up in a spreadsheet and work it out that way. Alternatively you can do it the old fashioned way, that people used to use before spreadsheets were available, and use the sum of the digits method.

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By stephenkendrew
04th Jun 2015 11:14

Sum of digits method...

...or the rule of 78.

That brings back memories (or am I just showing my age!)

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