How to Calculate a Car Loan in Excel
Launch Microsoft Excel., Open a new worksheet and save the file with a descriptive name such as "Car Loan.", Create labels for the cells in A1 down through A6 as follows: Car sale price, Trade-in value, Down payment, Rebates, Additional charges and...
Step-by-Step Guide
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Step 1: Launch Microsoft Excel.
The car sale price is negotiated with the dealership.
The dealer incentive, rebates and additional features items may not apply to your situation. , ,, Type "=B6," without quotation marks, in cell E1 to copy over the amount financed.
Make sure your interest rate is entered as a percentage in cell E2.
Enter the loan term in months in cell E3. , , In this step we must add the Amount Financed (E1)
- this may seem counterintuitive, but because Excel correctly treats our calculated Payment as a cash outflow and assigns it a negative value, we must add back the Amount Financed to reach a Total Interest Paid amount." This formula calculates the total of all payments less the amount financed to arrive at the total interest paid over the life of the loan. , You can see how the scenario would look with a higher or lower interest rate, a shorter or longer loan term or with a larger down payment. -
Step 2: Open a new worksheet and save the file with a descriptive name such as "Car Loan."
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Step 3: Create labels for the cells in A1 down through A6 as follows: Car sale price
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Step 4: Trade-in value
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Step 5: Down payment
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Step 6: Rebates
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Step 7: Additional charges and Amount financed.
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Step 8: Enter the amounts for each item from your proposed car loan in cells B1 down through B5.
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Step 9: Calculate the amount financed in cell B6 by entering "=B1-B2-B3-B4+B5" in the cell
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Step 10: without quotation marks
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Step 11: and pressing "Enter."
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Step 12: Make labels for the loan details in cells D1 down through D4 as follows: Amount financed
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Step 13: Interest rate
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Step 14: Loan Term and Payment amount.
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Step 15: Fill in the information for the loan details in cells E1 down through E3.
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Step 16: Figure the payment amount by entering the following formula
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Step 17: without the quotation marks
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Step 18: in cell E4: "=PMT(E2/12
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Step 19: Add up the total interest paid over the life of the loan in cell E5 by entering the following formula
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Step 20: without quotation marks: "=(-E4*E3)+E1.
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Step 21: Review your entries and results and make adjustments to the variables.
Detailed Guide
The car sale price is negotiated with the dealership.
The dealer incentive, rebates and additional features items may not apply to your situation. , ,, Type "=B6," without quotation marks, in cell E1 to copy over the amount financed.
Make sure your interest rate is entered as a percentage in cell E2.
Enter the loan term in months in cell E3. , , In this step we must add the Amount Financed (E1)
- this may seem counterintuitive, but because Excel correctly treats our calculated Payment as a cash outflow and assigns it a negative value, we must add back the Amount Financed to reach a Total Interest Paid amount." This formula calculates the total of all payments less the amount financed to arrive at the total interest paid over the life of the loan. , You can see how the scenario would look with a higher or lower interest rate, a shorter or longer loan term or with a larger down payment.
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Diane Ferguson
Brings years of experience writing about creative arts and related subjects.
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