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Finance / July 14, 2018 / Hana Cannon

There are two basic parts to the cost of a car loan the principal and the interest. The principal is the negotiated cost of the vehicle itself. The interest refers to the total amount of the costs accrued over the life of the loan based on the principal amount and the stated interest rate.

The future value of annuity due formula is used to calculate the ending value of a series of payments or cash flows where the first payment is received immediately. The first cash flow received immediately is what distinguishes an annuity due from an ordinary annuity. An annuity due is sometimes referred to as an immediate annuity.

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