# How do they calculate what your monthly auto loan payment will be?

So, I recently bought a new vehicle and was wondering how my monthly payments were figured out. After digging around a bit, I found this site where a high school teacher has posted the formula as an exercise for her students. Not only that, but I stumbled across this other website where I could find simple solutions to the most of my financial woes.

Well, I thought I would share this gem in case anybody else is interested.

$\frac{P(\frac{i}{12})}{(1-(1+\frac{i}{12})^{-n})}$

You can go to this site and the Almighty Internet will give you the same answer.

You have a principal amount of $4049.00. Your finance charge is calculated to be$538.12. Your interest rate is 8.29%. What formula was used to arrive at the value \$538.12?