How to find the inerest pay in 3 years

  • Thread starter Thread starter 3dsets
  • Start date Start date
3

3dsets

Hi all
I would like to know wich formula to use to calculate the interest pai
in a 3 years loan

Principal : 16808.10
Interest rate :2.75%
term :3 years

I would like to get the "Cost to borrow" in just one step formula
I can calculate the monthly payment , multiply this for 36 months an
take away the principal, but I think there might be a way to do thi
directly.
Thanks a lot for your time and attention at this matte
 
Hi 3dsets!

I'll assume that your rate of 2.75% is annual nominal compounded
monthly.

Two approaches

(your existing approach)

=PMT(2.75%/12,36,16808.1,0,0)*36+16808.1
Returns: -722.107418390045

Uses PMT to calculate the repayments which are multiplied by the
number of payments to find total repayments. If we add back in the
principal, this gives us the interest element.

=CUMIPMT(2.75%/12,36,16808.1,1,36,0)
Returns: -722.107418389427

Uses the Analysis ToolPak function CUMIPMT to calculate interest from
periods 1 to the final period.

Analysis ToolPak needs to be installed and selected as an Addin for
this to work (failing which, you'll get the return of #NAME?).

This is why we might prefer to use the approach you were using rather
than rely on a formula that requires the Analysis ToolPak addin.
 
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