In this video we discuss how to calculate a car loan or car monthly payment amount in excel. We go through a detailed example showing step by step how to create the formula Transcript/notes Here is the formula to calculate monthly car payments and the definitions of each of the variables. As you can see there are 5 things we need to know. The principal or amount of the loan, the annual or yearly interest rate, the number of payments per year, which is 12, the number of years of the loan, and the total number of payments. As an example, lets say that after the down payment, you are left owing $23,000, which is your principal. The annual interest rate is 5.4%, which as a decimal is 0.054, there are 12 payments per year and the loan is for 5 years. So to calculate the total number of payments, in cell B6, we type in an equals sign, then we left click on cell B4, the number of payments per year, then type in a multiplication sign, shift 8 on the keyboard, then left click on the number of years, cell B5, then hit the enter key, and we get a total of 60 payments. Now, what is the monthly car payment? We are going to calculate it, and put the answer in cell B10, so, we left click on cell B10, so it is highlighted. Next, we type in an equals sign. Referring to the formula, we first need to type in an open parenthesis, then we left click on the principal amount, cell B2. Next we type in a multiplication sign, which is shift 8 on the keyboard. From here, we type in an open parenthesis, then we left click on the yearly rate, cell B3, and next we type in a division sign, which is a forward slash in excel. Now we left click on the number of payments per year, which is cell B4. Next, we are going to type in 2 closed parenthesis, which closes off the top part of the formula. From here we type in a division sign, and then an open parenthesis. Again, following the formula, we type in a 1 followed by a minus sign. Next we type in another open parenthesis, then type in a 1, followed by an addition sign. Now we type in an open parenthesis, then we need to left click on the annual rate, cell B3, then type in a division sign. Next we left click on the number of payments per year, cell B4, and then we type in 2 closed parentheses. From here we need to type in a to a power symbol, which is called a carrot sign in excel, which is shift 6 on the keyboard and then we type in an open parenthesis. Next we type in a minus sign and then we need to left click on the total number of payments, cell B6. And then to finish, we type in 2 closed parentheses, and then we can hit the enter key and we have $438.27 rounded off as the monthly payment. Here is this calculation written out by hand, as we do get the same answer. Now we have a car payment calculator as we can change to loan to say $30,000, hit enter and an immediate answer. And you can do this with all of the variables as you see here. Chapters/Timestamps 0:00 Formula to calculate monthly car payment amount by hand 0:10 Variables needed 0:20 Example set up 0:37 Calculate the total number of payments 0:57 Start of excel formula to calculate monthly car payment amount 2:41 Answer