Table of Contents### Calculating Interest Costs

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When you know the payment, you can calculate the total interest costs of the loan by first figuring the total of all the payments and then subtracting the principal. The remainder is the total interest paid over the life of the loan.

Figure 17.3 shows a worksheet that performs this calculation. In column B, cell B7 contains the total amount paid (the monthly payment multiplied by the number of months), and cell B8 takes the difference. Column C performs the same calculations on the loan with a balloon payment. As you can see, in the balloon payment scenario, the payment total is about $2,600 smaller, but the total interest is about $400 higher.