I can never get Quicken loan interest rate to be correct

I have tried over the years to enter car loans, motorcycle loans, personal loans and the interest/principal never works. This seems so basic to a finance system??? I've been using Quicken and/or Quickbooks for 20+years and I can't believe this. What am i missing.

I have a loan...
Amount Financed: $10,000
Interest Rate: 4.99%
Finance Charge: $528.08
Total of Payments: $10,528.08
Monthly amount $438.68 ($438.44 on last payment).

My calculation is the interest will be $528.08/24 = $22/mth and princ = $416.67

When I enter this into Quicken,
Original Balance=$10,000
Current Interest Rate=4.99
Compound Period=Monthly
= Monthly Payment of $438.67 <-- close enough

But, it shows the payment as being
Principal is $397.04 and Interest of $41.67
Quicken thinks I'm paying $1000 in interest over loan.

I've tried everything. I'm a software leader for 30+ years so am mystified why this is going on. Either I am doing something wrong (so, shame on Quicken for making is so hard for a smart enough guy to do a simple task) or Quicken folks don't care about something so basic.

I would love to hear an explanation or rationale for this not working as I would expect.


  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    edited April 2021
    "My calculation is the interest will be $528.08/24 = $22/mth and princ = $416.67"
    No.  With an amortizing loan the split between principal and interest changes with each payment.  Early on, when the loan principal is high, most of the payments apply to interest.  As the loan balance declines more and more of the payment is allocated to principal, less to interest, and eventually the loan is paid off.
    Here's Excel's calculation for the loan:

    Quicken is doing it correctly.  You're mistaken in your understanding of how loan amortization plays out.
  • Ah, humility my old friend. Sorry about that - I guess it there was something on the screen that told me the total interest paid on the loan that might have tipped me off. Thanks much
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