ClarityHow to use this tool
- Enter current balance, annual nominal rate (%), fixed monthly payment.
- Select Calculate to view the result.
- Check the method and assumptions below before using the result.
Input reference and sample values
Use the units and choices shown for each field. Sample values are provided for practice, not as recommendations.
| Input | Format and units | Sample |
|---|---|---|
| Current balance | Numeric value. Zero or positive. | 5000 |
| Annual nominal rate (%) | Numeric value. Zero or positive. Maximum: 100. | 12 |
| Fixed monthly payment | Numeric value. Minimum: 0.01. | 250 |
Result for these sample inputs
23 months
- Total interest
- 606.739633
- Total repaid
- 5606.73963
- Original balance
- 5000
- Final payment
- 106.739633
Select Try the example in the form to load these values and calculate them again. This replaces the current form inputs. Compare the result with the method and worked explanation below.
The method, explained
Each month, add interest at annual rate ÷ 12 ÷ 100, then subtract the fixed payment. The final payment is reduced to the remaining amount due.
With a 1,200 balance, zero interest and payments of 100 per month, repayment takes 12 months and total interest is zero.
What to keep in mind
This simplified model compounds monthly, excludes fees and new borrowing, and holds the rate and payment constant. Many credit cards accrue interest daily. Results are estimates, not a lender payoff quote; scenarios over 1,200 months are rejected.
Reference: CFPB: How credit card interest is calculated
Common questions
Why can a payment be too low?
If the payment does not exceed the first month’s interest, the balance cannot fall under this model.
Can I use this for a changing minimum payment?
No. It assumes the same payment each month. A minimum-payment schedule needs the lender’s rules.
Methodology maintained by ClarityKit. How these tools are built and checked.