Formula and Explanation
HP: payment = P x r(1+r)^n / ((1+r)^n - 1); PCP: payment = (P(1+r)^n - balloon) x r / ((1+r)^n - 1)
HP repays the full financed balance through monthly instalments. PCP leaves a guaranteed future value as an optional final payment, so the monthly payment is calculated after discounting that future balloon back across the finance term.
Variable descriptions
- vehiclePrice($)
- Vehicle price: Vehicle price measured in $, entered as a known value.
- deposit($)
- Deposit: Deposit measured in $, entered as a known value.
- apr(%)
- Interest rate / APR: Interest rate / APR measured in %, entered as a known value.
- termMonths(months)
- Loan term: Loan term measured in months, entered as a known value.
- fees($)
- Fees financed: Fees financed measured in $, entered as a known value.
- balloon($)
- Guaranteed future value / balloon: Guaranteed future value / balloon measured in $, entered as a known value.