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-   -   Anyone who has financed with Long and McQuade or works for them...HELP! (http://www.talkbass.com/forum/f30/anyone-who-has-financed-long-mcquade-works-them-help-1006338/)

 jazzonlyjazz 08-11-2013 01:57 AM

Anyone who has financed with Long and McQuade or works for them...HELP!

So I'm planning on financing a MIM Fender P-Bass and someone on TB messaged me on how it work but I don't understand all of it. I'm trying to do the calculations for the P-Bass, but the member gave me this example:

If something costs \$1500..

Total sale is \$1500.00
After tax - \$1575.00
Downpayment - \$500.00
total balance on account - \$1075.00

Financed over 1 month - Monthly Payment amount -1,075.00 Total interest - 0.00
Financed over 2 months - Monthly Payment amount -548.95 Total interest - 22.88
Financed over 3 months - Monthly Payment amount -368.54 Total interest - 30.58
Financed over 4 months - Monthly Payment amount -278.34 Total interest - 38.32
Financed over 6 months - Monthly Payment amount - 188.16 Total interest - 53.88
Financed over 12 months - Monthly Payment amount -98.05 Total interest - 101.46

I don't understand where these numbers in BOLD came from: I did 1075/2, 1075/3, etc., and got different numbers from those...I don't understand but I want to fully know what I'm getting into.

He has also told me how to find out the total interest on the example and he told me the rate is 1.42%?

Much help would be appreciated. Thanks

 Munjibunga 08-11-2013 02:40 AM

Multiply the number in bold by the number of months. Then subtract \$1,075 from that. You get their interest amount within a few cents.

So let's take the three-month plan. \$368.54 X 3 = \$1,105.62. Then \$1,105.62 - \$1,075.00 = \$30.62, the interest, within a few cents. That's \$15.27 for the first month, \$10.18 for the second month, and \$5.09 for the third month, totaling \$30.54 (close) for the three months at the 1.42% per month interest rate against the remaining balance. The interest amount decreases as you pay off the balance.

To get the numbers, you multiply the balance for each month by 1.42 percent then add up the monthly results. After you make a month's payment, you're not going to pay interest on that part of the loan any more - just what's left. Keep in mind that the 1.42 percent is per month. If you finance the bass for 12 months, you'll have paid 9.4% of the loan amount in interest. That's not usury, but it may be high these days. If you go with three months, you'll pay a total of 2.8 percent of the total. I bought my first bass in 1977 with a \$350 loan from AVCO. The interest rate was 23%. My payment is \$15 a month. It'll be paid off this November.

 jazzonlyjazz 08-11-2013 02:50 AM

Quote:
 Originally Posted by Munjibunga (Post 14712251) Multiply the number in bold by the number of months. Then subtract \$1,075 from that. You get their interest amount within a few cents. So let's take the three-month plan. \$368.54 X 3 = \$1,105.62. Then \$1,105.62 - \$1,075.00 = \$30.62, the interest, within a few cents. I'm not sure how they arrive at the 1.42% interest. It looks like you get hit for the first two months of interest if you go to two months. The interest amount decreases as you pay off the balance..
Maybe I worded it wrong. Where do the numbers in bold come from? They're definitely not the results of doing 1075/2, 1075/3, etc.

 RyFi 08-11-2013 02:54 AM

These results are from application of a standard compound-interest formula. You can learn about it if you want if you want - I'm sure you could Google it.

 jazzonlyjazz 08-11-2013 02:58 AM

Quote:
 Originally Posted by RyFi (Post 14712263) These results are from application of a standard compound-interest formula. You can learn about it if you want if you want - I'm sure you could Google it.
Still lost. I was never good at math. I googled the formula but don't know which numbers to put in where.

 fhm555 08-11-2013 06:57 AM

What folks have been trying to explain to you is the quicker you pay off your loan, the less interest you will pay.

Simply stated, interest is the profit your lender makes off you when you borrow money.

Since it seems you are not grasping the concept, in a nutshell what that means is the longer you take to pay off your compound interest loan, the more your lender is going to make off the loan, which in turn means the bass is going to cost you more the longer you take to pay it back.

The numbers in bold are simply examples used to illustrate the concept of compound interest and how a loan of that type costs you more the longer you string it out. Your actual payment will depend entirely on the deal you make with your lender.

Hope this helps.

 jazzonlyjazz 08-11-2013 05:21 PM

Quote:
 Originally Posted by fhm555 (Post 14712499) What folks have been trying to explain to you is the quicker you pay off your loan, the less interest you will pay. Simply stated, interest is the profit your lender makes off you when you borrow money. Since it seems you are not grasping the concept, in a nutshell what that means is the longer you take to pay off your compound interest loan, the more your lender is going to make off the loan, which in turn means the bass is going to cost you more the longer you take to pay it back. The numbers in bold are simply examples used to illustrate the concept of compound interest and how a loan of that type costs you more the longer you string it out. Your actual payment will depend entirely on the deal you make with your lender. Hope this helps.
I think I know that. Obviously. I just wanted to know where the numbers I bolded came from...kinda disappointed to find out those were just examples

 Munjibunga 08-12-2013 06:14 PM

Quote:
 Originally Posted by jazzonlyjazz (Post 14712259) Maybe I worded it wrong. Where do the numbers in bold come from? They're definitely not the results of doing 1075/2, 1075/3, etc.
They include the interest. So, for instance, if you divide \$1,075 by 3, you get 358.33. Your payment on the 3-month plan would be \$368.54. If you subtract 358.33 from \$368.54 you get \$10.21, which is the interest portion of the payment. If your payment was \$358.33, you wouldn't be paying any interest.

 bolophonic 08-12-2013 06:17 PM

 jazzonlyjazz 08-12-2013 06:19 PM

Quote:
 Originally Posted by bolophonic (Post 14720008) Isn't anyone but me curious about this \$1500 MIM Precision? Where are the pics?
No it was jsut an example of something that costs \$1500 and someone had to finance it

 Munjibunga 08-12-2013 06:21 PM

Quote:
 Originally Posted by jazzonlyjazz (Post 14714724) I think I know that. Obviously. I just wanted to know where the numbers I bolded came from...kinda disappointed to find out those were just examples
The examples are probably what you will pay. Again, the numbers in bold are the principal (\$1,075/number of months) PLUS the interest. It's not complicated.

 PazzoBasso 08-12-2013 06:35 PM

Quote:
 Originally Posted by Munjibunga (Post 14712251) I bought my first bass in 1977 with a \$350 loan from AVCO. The interest rate was 23%. My payment is \$15 a month. It'll be paid off this November.
:D

 HaMMerHeD 08-12-2013 07:00 PM

This...isn't really complicated. At all. You are paying interest with each payment. The amount above principal is interest.

 jazzonlyjazz 08-16-2013 03:15 AM

I'm such a stupid person. I Still don't understand the formula...gahh

 jazzonlyjazz 08-16-2013 03:25 AM

Frustrated.

Here's what I got so far trying to figure out how much I would pay for a Geddy Lee Jazz bass. All in CAD

total: 899.99
After tax: 944.99
Downpayment: \$100 (everything depends on how much I give on downpayment but I chose \$100)
Rebate: \$50
total after on balance: 794.99

1 month: 794.99. Interest: \$0
2 months: ?????? Interest: ?????
3 months
4 months
6 months
12 months

That's all I got.
I was told the interest rate is 1.42% (confirmed with L&M)

 jazzonlyjazz 08-16-2013 03:39 AM

Quote:
 Originally Posted by Munjibunga (Post 14712251) So let's take the three-month plan. \$368.54 X 3 = \$1,105.62. Then \$1,105.62 - \$1,075.00 = \$30.62, the interest, within a few cents. That's \$15.27 for the first month, \$10.18 for the second month, and \$5.09 for the third month, totaling \$30.54 (close) for the three months at the 1.42% per month interest rate against the remaining balance. The interest amount decreases as you pay off the balance. To get the numbers, you multiply the balance for each month by 1.42 percent then add up the monthly results. After you make a month's payment, you're not going to pay interest on that part of the loan any more - just what's left. Keep in mind that the 1.42 percent is per month. If you finance the bass for 12 months, you'll have paid 9.4% of the loan amount in interest. That's not usury, but it may be high these days. If you go with three months, you'll pay a total of 2.8 percent of the total.
UGHHHHH I STILL DONT GET IT

 rob2966 08-16-2013 04:57 PM

Quote:
 Originally Posted by jazzonlyjazz (Post 14736713) Frustrated. Here's what I got so far trying to figure out how much I would pay for a Geddy Lee Jazz bass. All in CAD total: 899.99 After tax: 944.99 Downpayment: \$100 (everything depends on how much I give on downpayment but I chose \$100) Rebate: \$50 total after on balance: 794.99 1 month: 794.99. Interest: \$0 2 months: ?????? Interest: ????? 3 months 4 months 6 months 12 months That's all I got. I was told the interest rate is 1.42% (confirmed with L&M)
Here is how you get the two month version:

- base monthly payment is \$794.99 / 2 (months) = \$397.50

- interest for month 1
(\$794.99 * 0.0142) = \$11.29

- interest for month 2
((\$794.99 - \$397.50) * 0.0142) = \$5.64

- total interest is \$11.29 + \$5.64 = \$16.93

- divided evenly over 2 months = \$16.93/2 = \$8.46

- monthly payment is base amount plus even interest =
\$397.50 + \$8.46 = \$405.96 / month

** although technically the amount of interest you pay "reduces" from month to month over the payment schedule, it is distributed evenly over all the payments (to give you the same cost each month).

I believe that is how it works (and the info you are looking for).

Later
Rob

 jazzonlyjazz 08-17-2013 01:55 AM

Hmm makes sense. I get it now. But I give up now. UGH. Too much to worry about and I decided not to finance.

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