Payment Calculator — Installments & Finance Cost

Enter Parameters

Adjust sliders or type values directly

Total Purchase Amount

Initial Down Payment

Annual Interest Rate

Number of Monthly Payments

months

Real-time Calculation Ready

Adjust parameters to see instant results

AI Summary & Key Formula

Payment Calculator Quick Reference

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Quick Answer

A payment calculator finds the fixed monthly instalment on a purchase after any down payment, using Payment = P × r / (1 − (1 + r)^−n), and shows the finance charge — total paid minus the amount financed. For example, $2,000 financed at 12% a year over 18 months costs about $122 a month and $2,195 in total, so the finance charge is $195 (9.8% of the amount financed). Use it to test retail financing, buy-now-pay-later and instalment offers against paying cash; it assumes a fixed rate and ignores late fees or deferred-interest penalties.

How This Calculation Works

Values calculate dynamically in real-time as you enter figures or adjust sliders.
The equation on the right is exactly what the calculator runs — check any result by hand.

Core Equation

Periodic Payment = PV × r / (1 − (1 + r)^(−n))
Where:
  PV = Amount financed (purchase price − down payment)
  r = Monthly interest rate (annual rate ÷ 12)
  n = Number of monthly payments

Total Finance Charge = (Payment × n) − PV
Finance Charge % = Finance Charge / PV × 100

How to Use the Payment Calculator

Quick 3-step guide for accurate and fast calculations

STEP 01

Enter your total purchase amount

In the Payment Calculator, fill in Total Purchase Amount, Initial Down Payment, Annual Interest Rate and Number of Monthly Payments.

STEP 02

Read your monthly payment amount

The Payment Calculator instantly shows Monthly Payment Amount, Total Interest Cost, Total Amount Paid and Finance Charge Percentage, updating as you type.

STEP 03

Compare scenarios

Change Initial Down Payment to see how it affects Monthly Payment Amount, then check the formula below to verify the math.

Specific Instructions:

Enter the total purchase amount, any down payment, the annual interest rate and the number of monthly payments (2–120). The calculator returns the monthly payment, total interest cost, total amount paid (including the down payment) and the finance charge as a percentage of the amount financed — revealing the true cost of the plan.

Payment Calculator Formula

The Payment Calculator uses the following formula, calculated in your browser as you change the inputs:

Periodic Payment = PV × r / (1 − (1 + r)^(−n)) Where: PV = Amount financed (purchase price − down payment) r = Monthly interest rate (annual rate ÷ 12) n = Number of monthly payments Total Finance Charge = (Payment × n) − PV Finance Charge % = Finance Charge / PV × 100

Sources:

CFPB — What is amortization?

Worked Example: Payment Calculator

Financed amount: $2,000 | Rate: 12% p.a. | Monthly | 18 months Monthly rate = 12/12/100 = 0.01 Payment = 2,000 × 0.01 / (1 − (1.01)⁻¹⁸) ≈ $121.96/mo Total paid: $2,195 | Finance charge: $195

Calculations run in your browser — your inputs are never stored on our servers.Formula sources & methodology

Frequently Asked Questions — Payment Calculator

What is a finance charge on an instalment plan?

A finance charge is the total cost of borrowing expressed in dollar terms — it is the difference between the total amount you repay and the original financed amount. It includes interest and any fees. For a $2,000 item on a 12-month instalment at 10% p.a., the finance charge is approximately $110, meaning you effectively pay $2,110 for a $2,000 purchase.

Is 0% financing actually free?

Usually not entirely. 0% financing offers from retailers often hide the cost elsewhere — in a higher purchase price compared to the cash price, mandatory insurance, or administrative fees. Always compare the 0% instalment price against the cash purchase price at another retailer to determine the true cost of 'free' financing.

How do I calculate the monthly payment for any purchase?

Use the formula: Monthly Payment = Loan Amount × Monthly Rate / (1 − (1 + Monthly Rate)^(−Months)). Alternatively, use this calculator: enter the financed amount, annual rate, and number of months, and the result appears instantly. Ensure you are using the monthly rate (annual rate ÷ 12).