1 Year Loan Calculator - Savvy Calculator

Introduction

Calculating loan repayments is a crucial aspect of financial planning. To simplify this process, we present the 1 Year Loan Calculator. This article not only provides you with a working calculator code in HTML and JS but also guides you on how to use it effectively.

How to Use

Enter the loan amount in the designated input field.
Input the annual interest rate as a percentage.
Press the “Calculate” button to obtain the monthly repayment amount.

Formula

The formula used for calculating the monthly repayment amount is the accurate and widely accepted formula:

$M = P \times ( 1 + r ) ^{n} - 1 r ( 1 + r ) ^{n}$

Where:

$M$ is the monthly repayment amount.
$P$ is the principal loan amount.
is the monthly interest rate (annual interest rate divided by 12 and converted to a decimal).
$n$ is the total number of payments (loan term in months).

Example

Suppose you have a loan of $10,000 with an annual interest rate of 5%. The monthly repayment can be calculated using the formula mentioned above.

$P = 10000, r = 100 \times 12 5, n = 12$

$M = 10000 \times ( 1 + 100 \times 12 5 ) ^{12} - 1 100 \times 12 5 ( 1 + 100 \times 12 5 ) ^{12}$

After solving, the monthly repayment amount ( $M$ ) will be obtained.

FAQs

Q1: How accurate is the 1 Year Loan Calculator?

The calculator uses a precise formula widely accepted for loan calculations, ensuring accurate results.

Q2: Can I use this calculator for loans with different terms?

This calculator is specifically designed for 1-year loans. For different terms, a modified formula is needed.

Q3: Why is the monthly interest rate calculated by dividing the annual rate by 12?

This conversion is necessary to get the monthly rate since there are 12 months in a year.

Conclusion

In conclusion, the 1 Year Loan Calculator is a valuable tool for individuals seeking to plan their finances effectively. By providing a simple yet accurate calculation, this calculator contributes to informed decision-making regarding loan repayments.