- #1

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Just wondering if someone could help me out this...

I have two loans of differing amounts and interest rates.

I have x amount of dollars that I want to pay on each loan to achieve the lowest possible interest payable.

How can I work it out?

- #1

- 5

- 0

Just wondering if someone could help me out this...

I have two loans of differing amounts and interest rates.

I have x amount of dollars that I want to pay on each loan to achieve the lowest possible interest payable.

How can I work it out?

- #2

CRGreathouse

Science Advisor

Homework Helper

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- 0

- #3

- 1,569

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The amount of interest paid over the life of the loan under ideal circumstances (e.g., no extra fees) is given by

[tex]P\left( \frac{ni/12}{1-(1+i/12)^{-n}}-1\right) [/tex]

P is the amount borrowed, n is the number of payments, and i is the annual interest rate as a decimal. So this formula can be used to compare amount of interest paid under two different P's and i's. This is assuming there is a payment every month. n would be 12t where t is the number of years.

Also try googling for a loan calculator... Not sure if you just want the answer or how it was arrived at (although I haven't said where the formula I stated came from).