Present Value Annuity

To pay for a major purchase, you can make regular payments, perhaps every month. To find out how much you will pay each month, click Utilities, then Compound Interest and then Present Value Annuity.

This window opens.

Enter the amount of money you are borrowing in the Loan box (in the lower right corner). Do not put a dollar sign.

The interest rate per year goes in the Nominal Annual Rate % box.

When you make the payments goes in the Compounding Box.

Enter the date you buy in Present Date.

Enter the date of the last payment the Future Date.

Click Calculate.

Your payment will be in the Regular Payment box.


Above shows that to borrow $2000 for three years with interest at 6%, you must make 36 monthly payments of $60.85.


You can work it the other way too. If you figure you can afford a monthly payment of (say $60), put 60 in the Regular Payment box and leave the Loan box empty. Click Calculate and in the Loan box is the amount you can borrow.