How to calculate interest for 18 , 24 , 30 and 36 months ??!!

raininman · #1 (**permalink**) 11-26-2008, 04:36 AM

Hi guys ha u doin ? .. I asked this question yesterday but it never showed up in the forums so i thought of posting it again...

I wanna calculate interest for a loan taken in 2007 ... Here's the scenario :

1- Loan amount : € 500,000

2- Final maturity : 3 years from the date of the first disbursement ( Disb date is 20th of Feb , 2007 )

3- Repayment : In four equal repayments of € 125,000 each ; 18 , 24 , 30 and 36 months after the date of disbursement ..

4- Interest rate : 20th Feb'07 - 20th july'07= 8.70288 ; 20th aug07 - 20th Jan08 = 9.40875 ; 20th feb08 - 20th july08 = 9.10563 ; 20th aug08 - 20th jan09 = 9.905 ...

As you can see in the scenario , for the first 18months € 125000 has to be paid , next 24months another 125000 and so on...

Does anyone know how to calculate the interest and principal ??... Your help is very much appreciated !!

Cheers, Raininman

raininman · #2 (**permalink**) 11-28-2008, 06:07 AM

Could anyone confirm if this is right :

The 1st repayment date is 20.8.08, so i calculated the interest from 20.2.07 to 20.8.08. Assuming there are 151 days from 20.2.07 to 20.7.07, interest for that period is $500,000 x 8.70288% x 151/365 = $18,002. Then the rate changes, so i calculated interest from 20.7.07 to 20.1.08 at 9.40875%. Assuming there're 184 days, the interest is $500,000 x 9.40875% x 184/365 = $23,715. The rate changes again, so did the same for 20.1.08 to 20.8.08 @ 9.10563%. Assuming 212 days, interest is $500,000 x 9.10563% x 212/365 = $26,444. So total interest to the 1st repayment date is $68,161. On this day, i should repay $125,000 + $68,161. After this 1st repayment, the principal drops to $375,000. Then i start all over again, calculating the interest from 20.8.08 to the 2nd repayment date, but this time i should apply the interest rate to $375,000, and not $500,000 anymore. You will end up paying more than $500,000 because of the interest.

Am i right ???

Cheers, R'man

brian · #3 (**permalink**) 01-17-2009, 04:41 PM

Are you asking us to do your home work?

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