How to Calculate Loan Comparison
Compare two loan options side by side — payments, total costs, and total interest.
The Formula
payment = P*(r*(1+r)^n)/((1+r)^n-1)The loan comparison formula uses the mathematical relationship: payment = P*(r*(1+r)^n)/((1+r)^n-1). Each variable in the formula represents a measurable quantity that affects the final result.
Step-by-Step Method
- 1Identify all input values needed for the loan comparison calculation.
- 2Substitute your known values into the formula: payment = P*(r*(1+r)^n)/((1+r)^n-1).
- 3Perform the arithmetic operations in the correct order (PEMDAS/BODMAS).
- 4Check that your result has the correct units and is within a reasonable range.
- 5Verify using the interactive Loan Comparison Calculator to confirm your answer.
Related Topics
loan comparisonmortgagemonthly paymenttotal interest
Use the Interactive Calculator
Skip the manual math — get instant results with our free Loan Comparison calculator.