You are planning to borrow $30,000 from the bank towards the purchase of a truck for your business. You will be paying it off fully in three years in 36 equal monthly payments. The bank has told you that the interest APR (Annual Percentage Rate) is 9.5%. You asked and found that the APR will be compounded monthly at the end of the month. You want to calculate and see what the monthly payment will be before heading to the bank for finalizing the loan.
The GnuCash Financial Calculator is used to calculate loan payment and mortgage payment by applying compound interest. It provides a way of entering the amount you wish to borrow, the interest or Annual Percentage Rate (APR) applicable, the repayment period and calculates the Equated Monthly Installment (EMI) payments to pay off the entire loan. Alternatively, if you know your capacity to pay and the repayment period, you can calculate the maximum amount you can borrow to keep within that limit.
Simple calculations in GnuCash
As we saw earlier, you can enter calculations in any amount field in the account registers. GnuCash will do the calculation for you and put the result in that field.
Some banks compound interest once a month, while others may compound continuously. Most banks will ask you to pay at the end of the month. This calculator allows you to set any of those options.
a. Present value
b. Future value
c. Payment Total
d. Periodic payment