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    Financial Celgene Can’t Cure the Biotech Blues

    January 09, 2018

    Financial Celgene Can’t Cure the Biotech Blues

    Celgene Can’t Cure the Biotech Blues

    Posted: 09 Jan 2018 06:54 AM PST

    One of John Paulson's Hedge Funds Crashed 70% Over the Last Four Years...

    Posted: 09 Jan 2018 10:03 AM PST

    Need help with a monthly loan payment calculation!

    Posted: 09 Jan 2018 09:48 AM PST

    Hi, I'm trying to figure out the proper way to calculate a monthly loan repayment, and the explanation for it.

    Say I want to take a auto loan for $15,000.00 at an interest rate of 3% per year, with a repayment period of 5 years. This is paid monthly, so that makes a total of 60 payments.

    Using some online calculators and using the excel PMT function (with input r = 0.03/12, number of periods =60, present value = 15000) gives me a monthly figure of $ 269.53. This means that my total payment is $ 269.53*60 = $ 16,167.82 .

    What I don't understand about this figure is doesn't this mean that the effective interest rate that I'm paying is $ 16,167.82-$15,000/$15,000.00, approximately 7.81%; or about 1.56% per year only? Far less than the 3% per year figure.

    Would it not make more sense if the monthly calculation is five years of interest atop of the principal, divided by the number of repayments? $ (15,000 * (1.035))/60; about $ 289.82.

    This gives the total repayment about $17,389.11. About a 15.93% interest rate over 5 years, or about 3.18% per annum.

    I'm not so sure which is the correct way to calculate, but most sources i've looked at points towards the first one. I can't seem to wrap my head around why it is; especially since the interest rate doesn't seem to match.

    Thanks and thanks again, Sorry if the post comes off confusing!

    submitted by /u/fineelectricide
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