Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.

Get a Professional Answer

Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.

100% Satisfaction Guarantee

Rate the answer you receive.

Ask F. Naz Your Own Question

F. Naz, B.Com

Category: Single Problem

Satisfied Customers: 5292

Experience: Have completed B.Com and CA Finalist

20040807

Type Your Single Problem Question Here...

F. Naz is online now

I'm hoping to find the formula on how a finance company

Customer Question

Hi, i'm hoping to find the formula on how a finance company calculate monthly repayment. Initially the only information that I have is that the loan amount is for £500, the interest rate (simple interest) is fixed at 0.7% per day, I want to repay over 5 installments and the term of the loan is 144 days. i'm trying to work backwards by finding the monthly repayment and then I can calculate what element is capital and what is interest. Any amortization calculations online assume payments are for a full month. Is there a formula out there that works out the monthly repayment for uneven days in a month? I know that the 1st repayment will be taken 22 days after the loan is drawn down.

Hi,thanks for your answer, however i do not believe it to be correct.I got a similar answer to you, however i used the rate of 0.2016, 144 days x.007 / 5, so an average monthly period of 28.8 days. My monthly installment being £167.78.As I explained in my question, the initial period was 22 days from the time the loan was drawn down until the 1st installment, therefore at the end of month 1 the interest would be correctly calculated at £77 and then the capital can be calculated by deducting the interest from the installment figure.I have contacted a number of maths forums and they have all said that the amortization formula that you and i have both used assumes that each period between the loan is equal rather than month 1 being 22 days and then 30 days in one month and 31 days in another month.the formula that I am trying to find is one that installments can be calculated for an uneven amount of days per period.Hope you can helpthanksVictoria