When planning to take out a loan, you might want to consider using a tool like the Ascend Loan Calculator. This helpful financial tool calculates your estimated monthly loan repayments based on the amount you intend to borrow, the term of the loan, and the annual interest rate. This article will dive into how the Ascend Loan Calculator works, the formula it uses, and provide an example of it in action.
How Does the Ascend Loan Calculator Work?
The Ascend Loan Calculator is an interactive tool embedded into a webpage. It features input fields for entering the loan amount, the loan term in years, and the annual interest rate. The user simply needs to fill these fields with the relevant data, then click on the “Calculate” button to obtain the estimated monthly payment.
A “Reset” button is also present, allowing the user to clear all the fields if they wish to perform a different calculation. The calculator displays the result in a read-only field that prevents manual alteration of the result.
This calculator is coded using HTML, CSS, and JavaScript, making it suitable for embedding into a variety of websites, including WordPress blogs.
What’s the Formula?
The Ascend Loan Calculator employs a widely-used formula for calculating loan payments. The formula used is:
cssCopy codeM = P[r(1+r)^n]/[(1+r)^n – 1]
Where:
- M is your monthly payment.
- P is the principal loan amount.
- r is your monthly interest rate (annual interest rate divided by 100, then divided by 12).
- n is the number of payments (the number of months you will be paying the loan).
This formula allows the calculator to determine your monthly repayments based on the loan amount (P), the loan term (n), and the annual interest rate (r).
An Example Calculation
Let’s say you plan to take out a loan of $200,000 with a term of 30 years and an annual interest rate of 5%.
Here’s how you would use the Ascend Loan Calculator:
- Enter 200000 into the “Loan Amount” field.
- Enter 30 into the “Loan Term” field.
- Enter 5 into the “Annual Interest Rate” field.
- Click the “Calculate” button.
The calculator will then display the estimated monthly payment. In this case, it would be approximately $1073.64.
Note: This is a simplified example, and real-world calculations might be more complex, including factors such as taxes, insurance, and type of interest rate (e.g., fixed vs. adjustable).
In summary, the Ascend Loan Calculator is a useful tool that simplifies the process of estimating your monthly loan repayments. However, it is important to remember that this calculator should only be used as a guide. For accurate financial advice, you should consult a financial advisor or your lending institution.