Car Affordability Calculator
Calculate recommended car purchase price using the standard 20/4/10 personal finance automotive rule.
Calculation Inputs & Parameters
5000
(Default)
6000
(Default)
6.5
(Default)
Recommended Maximum Car Price
$27,084
Max Monthly Payment (10% Rule)
$500 / mo
Financed Loan Amount (48 mo)
$21,084
Cash Down Payment
$6,000
How the Calculation Works
Applies the 20/4/10 rule: 20% down, 4-year loan, monthly payment under 10% gross income.
Formula: Affordable Price = Down Payment + PV(10% Income, 48 mo, APR)
Practical Worked Example
Given Inputs: 5,000/mo income | 6,000 down | 6.5% APR
Calculated Output: Afford: ~27,200 car (500/mo payment)
- Calculate max 4-year loan supported by 500/mo.