Weekly Loan Calculator: Understanding Your Financing Options

What is a Weekly Loan?

A weekly loan is a type of short-term financing where the borrower agrees to repay the loan amount plus interest in weekly installments. This type of loan is often used for small business financing, personal loans, or short-term cash flow needs.

The Weekly Loan Payment Formula

The formula used to calculate the weekly payment for a loan is:

\[P = L\frac{r(1+r)^n}{(1+r)^n-1}\]

Where:

• \(P\) = Weekly payment
• \(L\) = Loan amount
• \(r\) = Weekly interest rate (annual rate divided by 52)
• \(n\) = Total number of weeks in the loan term

Step-by-Step Calculation Process

1. Calculate the weekly interest rate: \[r = \frac{\text{Annual Interest Rate}}{52}\]
2. Apply the formula to calculate the weekly payment.
3. Calculate total payment: \[\text{Total Payment} = \text{Weekly Payment} \times \text{Number of Weeks}\]
4. Calculate total interest: \[\text{Total Interest} = \text{Total Payment} - \text{Loan Amount}\]

Example Calculation

Let's calculate the weekly payment for a $5,000 loan at 10% annual interest for 52 weeks:

1. \(r = \frac{10\%}{52} = 0.001923\)
2. \(P = 5000 \times \frac{0.001923(1+0.001923)^{52}}{(1+0.001923)^{52}-1} = 105.82\)
3. Total Payment = $105.82 × 52 = $5,502.64
4. Total Interest = $5,502.64 - $5,000 = $502.64

Visual Representation

The green portion represents the principal ($5,000), while the red portion shows the total interest ($502.64) over the life of the weekly loan.