So now you should be able to calculate the monthly payment, M. The one-liner for a program would be (adjust for your favorite language): Sorry, for the long way of explaining it, but I just wanted to be clear for everybody. Then multiply the result times J and then times P. Take the inverse of that (if you have a 1/X button on your calculator push that). So to calculate it, you would first calculate 1 + J then take that to the -N (minus N) power, subtract that from the number 1. (it does not appear too clearly on some browsers) Okay now for the big monthly payment ( M) formula, it is: N = number of months over which loan is.J = monthly interest in decimal form = I / (12 x 100).The following assumes a typical conventional loan where the interest is compounded monthly.įirst I will define two more variables to L = length, the length (in years) of the loan, or at least the length over which the loan is amortized.P = principal, the initial amount of the loan.Look here for the Canadian formula.įirst you must define some variables to make it easier to set up: NOTE: This first part is for United States mortgages.
NEW! Want to see how this is derived? Find a full derivation here! (Thanks goes to "Hans" Gurdip Singh.) Spreadsheet (Excel, Lotus, Quattro) users should look here Instead of just showing some boring source code, I thought I would The amortization table, including the accrued interest and extra principal
LOAN CALC ADFITION PRINCIPAL HOW TO
I have gotten numerous requests from individuals wondering what the simple formula is for calculating the monthly payment and also how to generate Mortgage calculations - how loan amortization works, the formula, algorithms and equations How to Calculate Mortgage Loan Payments, Amortization Schedules (Tables) by Hand or Computer Programming
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