Overhaulin'

How do you calculate finance charges on a car loan?

Financed $23,927.00 (60 months) 5.5% APR. Papers state "Dollar amount credit will cost you: $3,557.80." How was this calculated? I thought you'd multiply total amount financed, $23,927.00, by 5.5% & that would be the finance charges - apparently I'm way wrong. Also, how do they calculate how much of each payment is applied to the interest? For instance, my payments are $105.72, deducted weekly from my paycheck. Typically approx. $80.00 is applied to principal & the remainder to interest. Also, while my payment / deduction remains the same every week, $105.72, why does the amount applied to the principal and interest vary each week? Sometimes $80.75 goes to principal & $24.97 to interest, sometimes $76.03 goes to principal & $29.69 to interest, etc. - it's different every week. I got printout of last 3 years' of payments and also found where approx. 2 years into the loan they applied $25.00 from one of my payments to a "Fee Assessment" with no explanation - payment was not late either. Okay you're still not answering my question. I am not "running around to get an auto loan quote" - I ALREADY have one, I need to know how they are coming up with the finance charge amount based on the APR - I can't figure out the formula they're using. And I have tried searching on Yahoo for the formula to figure this out but I can't find anything specific to what I am trying to figure out, so I was hoping somebody who already knows the formula could just tell me. Thanks for your answers so far but they're really not addressing what I am asking.

Public Comments

1. if you type how to calculate money in yahou you will get all of the formulas required to answer this question and many others!!!