Worked example · Form CA-11
Car Loan Calculator Form CA-11
The dealer hands you a monthly payment. This page hands you the whole loan: the payment’s formula, the total interest, and the true monthly cost once insurance and fuel take their seats. One worked example, then your turn.
The worked loan: $22,000 at 7% for 60 months
- Car price$28,000
- Down payment + trade-in$6,000
- Loan amount$22,000
- Monthly payment (amortization formula)$435.63 × 60
- Total of payments$26,138
- Total interest$4,138
- True monthly cost (+$150 ins, +$100 fuel)$685.63
The payment comes from the amortization formula lenders use themselves: loan × r(1+r)n ÷ ((1+r)n − 1), with r the monthly rate (0.5833% here) and n the number of payments (60). The interest is just payments minus principal: $26,138 − $22,000.
Same loan, different terms
| Term | Payment | Total interest |
|---|---|---|
| 36 months | $679.30 | $2,455 |
| 48 months | $526.82 | $3,287 |
| 60 months | $435.63 | $4,138 |
| 72 months | $375.08 | $5,006 |
Read the table right to left, not left to right: the 72-month row “saves” $60 a month and costs $912 more in interest plus a full extra year of payments on a depreciating car. If the 60-month payment doesn’t fit, the car doesn’t fit — the longer term is not a discount.
Price your own loan
The interactive version runs the same arithmetic on your numbers — price, down payment, trade-in, rate, term — and stamps whether the true monthly cost fits the 15% rule on your take-home pay: open the Car Affordability Calculator, “Price the loan” tab. No sign-up, runs in your browser, and it keeps your numbers on your device.
Common questions Form CA-11
How do I calculate a car loan payment?
With the amortization formula: payment = loan × r(1+r)n ÷ ((1+r)n − 1), where r is the monthly rate and n is the number of payments. On $22,000 at 7% for 60 months it posts $435.63 a month.
How much interest will I pay on a car loan?
Payment × term, minus the loan. On the worked example: $435.63 × 60 = $26,138 in payments, minus $22,000, is $4,138 in interest. At 72 months the same loan costs about $5,006 in interest.
What is the true monthly cost of a car loan?
The payment plus insurance plus fuel and upkeep: $435.63 + $150 + $100 = $685.63 a month on the worked example. The dealer quotes the first line; your budget pays all three.