Calculating an installment loan payment using simple interest 8. Aa Aa Calculating the Loan Payment on a Simple-Interest Installment Loan Installment loans allow borrowers to repay the loan with periodic payments over time. They are more common than single-payment loans because it is easier for most people to pay a fixed amount periodically (usually monthly) than budget for paying one big amount in the future. Interest on installment loans may be computed using the simple interest method or the add-on method For an installment loan using simple interest and equal payments throughout the life of the loan, a portion of each repayment is dedicated to the principal and a portion to the interest. Remember that interest is charged only on the outstanding balance. This means that as each payment s made, more of it s allocated to The following table lists the monthly installment payment amounts required to repay $1,000 over various time frames and at various fixed-interest rates. The payment is the same each month, and the allocation between principal and interest is always Monthly Installment Loan Payments to Repay a $1,000, Simple Interest Loan Number of Monthly Payments Rate of Interest 12 24 36 48 60 72 $85.6 $43.87 $29.97 $23.03 $18.87 $16.10 $14.13 $86.07 $44.32 $30.42 $23.49 $19.33 $16.57 $14.6 $30.88 $86.53 $44.77 $23.95 $19.80 $17.05 $15.09 $86.99 $45.23 $31.34 $24.4 $20.28 $17.53 $15.59 $87.45 $45.68 $31.80 $24.88 $20.76 $18.03 $16.09 $87.92 $46.14 $32.27 $25.36 $21.25 $18.53 $16.60 $88.38 $46.6 $32.74 $25.85 $21.74 $19.03 $17.12 $19.55 $88.85 $47.07 $33.21 $26.33 $22.24 $17.65 $26.83 $20.07 $89.32 $47.54 $33.69 $22.75 $18.19 $27.33 $89.79 $48.0 $34.18 $23.27 $20.6 $18.74 $90.26 $48.49 $34.67 $27.83 $23.79 $21.14 $19.27 $90.73 $48.96 $35.16 $28.34 $24.32 $21.69 $19.86 $91.20 $49.44 $35.65 $28.85 $24.85 $22.25 $20.44 $29.37 $91.68 $49.92 $36.15 $25.39 $22.81 $21.02 $92.16 $50.4 $36.66 $29.90 $25.94 $23.38 $21.6 $92.63 $50.90 $37.16 $30.43 $26.49 $23.95 $22.21 20