How do I calculate in excel the monthly interest from cost of credit?

How do I calculate in excel the monthly...

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I am trying to calculate the monthly interest on a finance agreement for a car using an excel spreadsheet. The only information I have available is the amount of credit, number of payments, repayment amount and cost of credit. It is slightly different to normal as there is a balloon payment at the end of the duration of finance. How do I calculate the interest on a monthly basis? 

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Scalloway Castle
By scalloway
01st Dec 2014 15:58

Excel

There are different methods. I would now use Excel

http://www.wikihow.com/Calculate-an-Interest-Payment-Using-Microsoft-Excel

I used to use the rule of 78

http://www.tiac.net/~mabaker/rule_of_78.html

Or use the old fashioned (pre Spreadsheet) method of allocating a fixed sum each month.

 

 

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By johngroganjga
01st Dec 2014 16:01

Do you mean you know the total amount of interest that will be paid over the life of the agreement but you want to allocate a portion of it to each month on a systematic basis?

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By sarahshaw05
01st Dec 2014 16:13

Scalloway, I think the rule of 78 is what I am after. I have used it before but I couldn't remember what the formula was. Thank you, I have been racking my brains for a few days. 

Johngroganjga, yes that is what I mean. 

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By johngroganjga
01st Dec 2014 16:19

The rule of 78 certainly one way, albeit perhaps a little rough and ready, and if you are happy with that further comment is superfluous.

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