“Savvy Spender” Documentation

Installment Options - How I Calculate it and How They Work

Introduction

I've found that understanding installment options can be incredibly useful when it comes to managing finances and making substantial purchases. In this explanation, I'll share how I calculate installment options and provide a step-by-step guide on how they work. Please note that while I've made every effort to ensure accuracy, I'm not entirely certain if this is the correct calculation. If you have any doubts or corrections, please feel free to share them.

Key Input Parameters

Before diving into the calculations, it's essential to gather the following key input parameters:

Step-by-Step Calculation

Let's walk through the process of calculating installment options with a detailed example using your specific calculation method:

Example Input:

Step 1: Calculate Simple Interest

Step 2: Calculate Factor Rate

Step 3: Calculate Monthly Payment

Step 4: Calculate Effective Interest Rate PA (EIR PA)

Step 5: Calculate Total Payment

Step 6: Review and Decision