Installment Calculator
Paying in installments with interest costs more than the sticker price. See the monthly payment, the total you will pay, and how much extra that is versus paying cash — so you can decide with the real numbers.
Your numbers
Result
- Total paid
- $1,134.72
- Extra interest
- $134.72
| Item | Value |
|---|---|
| Cash price | $1,000.00 |
| Payment × 12 | $94.56 |
| Total paid | $1,134.72 |
| Extra interest paid | $134.72 |
How the payment is figured
The payment comes from the standard amortization formula: payment = price × i ÷ (1 − (1 + i)^−n), where i is the monthly rate and n the number of payments. A $1,000 item at 2% a month over 12 payments is about $94.56 a month, or $1,134.72 total — roughly $135 more than cash.
Cash usually wins
If you have the money, paying cash (or asking for a cash discount) almost always beats paying interest. Installments make sense when they are genuinely interest-free and there is no cash discount — then paying over time and keeping your money invested can come out ahead. Compare the totals both ways.
Watch the effective rate
A "small" monthly rate compounds into a large annual one: 2% a month is about 27% a year, not 24%. Retail installment and store-card rates are often higher than they look. If you carry the balance, the interest can dwarf any convenience.
Informational and educational result. Not a substitute for professional advice.
Frequently asked questions
Sources
- Financial math — amortization (Price system)
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