How to Calculate a Loan Payment at 7 Percent Per Annum

Calculating a 7-percent per annum loan rate is easy to do. It involves converting the interest rate to a decimal and then multiplying that figure times the value of the loan.

Loan Value as Number

Write the loan value as a number. For example, a $50,000 loan should be written as 50,000.

Decimal Conversion

Change the 7-percent per annum rate to a decimal by writing it as 0.07.

Annual Interest

Multiply 0.07 times 50,000 to get 3,500.

Change to Dollars

Write 3,500 as $3,500.

Interest Per Year

Read the loan as having an annual interest due of $3,500.

Total Interest

Multiply $3,500 times the number of years. For a five-year loan, the answer would be 5 times $3,500 = $17,500.

References

• AAA Math: Simple Interest