Correct way to book a [auto] loan

[John Kuhn]

On Tue, Jan 08, 2002 at 04:02:35PM -0500, Nathan Cummings wrote:
> here is the problem: a new car is just purchased, and for arguments
> sake, let's say the total purchase price (car+tax+tags+etc) is $10,000.
> A $2,000 down payment is made at the time of purchase and the remaining
> $8,000 will be financed. Again for a concrete example, let the interest
> rate be 3.9% for 36 months making a monthly payment of $235.84 and a 
> final payment total of $8490.24, with the difference of $490.24 being
> the finance charges incurred over the period of the loan.

Based on my calculations, your monthly principal/interest splits would be:

$8,000 loan  36 month  3.9%

            Principal  Interest  Balance
2002-01-01    209.84     26.00     7790.16
2002-02-01    210.52     25.32     7579.64
2002-03-01    211.21     24.63     7368.43
2002-04-01    211.89     23.95     7156.54
2002-05-01    212.58     23.26     6943.96
2002-06-01    213.27     22.57     6730.69
2002-07-01    213.97     21.87     6516.72
2002-08-01    214.66     21.18     6302.06
2002-09-01    215.36     20.48     6086.70
2002-10-01    216.06     19.78     5870.64
2002-11-01    216.76     19.08     5653.88
2002-12-01    217.46     18.38     5436.42

2003-01-01    218.17     17.67     5218.25
2003-02-01    218.88     16.96     4999.37
2003-03-01    219.59     16.25     4779.78
2003-04-01    220.31     15.53     4559.47
2003-05-01    221.02     14.82     4338.45
2003-06-01    221.74     14.10     4116.71
2003-07-01    222.46     13.38     3894.25
2003-08-01    223.18     12.66     3671.07
2003-09-01    223.91     11.93     3447.16
2003-10-01    224.64     11.20     3222.52
2003-11-01    225.37     10.47     2997.15
2003-12-01    226.10      9.74     2771.05

2004-01-01    226.83      9.01     2544.22
2004-02-01    227.57      8.27     2316.65
2004-03-01    228.31      7.53     2088.34
2004-04-01    229.05      6.79     1859.29
2004-05-01    229.80      6.04     1629.49
2004-06-01    230.54      5.30     1398.95
2004-07-01    231.29      4.55     1167.66
2004-08-01    232.05      3.79      935.61
2004-09-01    232.80      3.04      702.81
2004-10-01    233.56      2.28      469.25
2004-11-01    234.31      1.53      234.94
2004-12-01    234.94      0.76        0.00

Note that your final payment is only 235.70 instead of your regular
payment of 235.84.  Total payments of 8,000 + 490.10 = 8,490.10.
To use this table you would have to manually modify the payment
split each month get the principal and interest credited correctly.
Yes, I actually do this.

This table is from a program that I wrote to do this calculation for
my mortgage payments.  I know that it is correct for my payments, but
I'm not sure that it is correct for the terms of your auto loan.  In
particular, check to see if the final payment is correct.

John