If, for example, you have a 5 year loan for $100,000 at 10% interest, what would your payment be?
The specific formula, using the information from the above example, along with the generic formula, would be helpful...
2006-09-17 16:10:05 · 7 answers · asked by Anonymous in Business & Finance ➔ Other - Business & Finance
monthly interest rate = i = 10%/12
5 years of monthly payments=60 payments
present value = payment*(1-1/(1+i)^n)/i
100,000 = payment*(1-1/(1+ 10%/12)^60)/(10%/12).
solve for payment
2006-09-17 16:20:57 · answer #1 · answered by fcas80 7 · 0⤊ 0⤋
There is a n amortization interest table used by banks to figure this out, but you figure this out by:
Payment = Amount of Loan * Amortization value where Av is found by 10%/12 (coumpounded monthly) is your % also n (number of payments 5 years * 12 months for a monthly pay period = 60n) so, you would use the table to find your Av value. However, my table I have currenlty doesn't have a 60n, let's make it this way:
3 year loan, $100,000, 12% interest.
Take our equation P = Amount * Av
to find AV we go, 12%/12 months = 1% n = years * compounded monthly payment 1 year = 12mnths * years = 36n. We come up with the number .03321 We solve using basic math:
P = 100,000 * .03321 P = $3,321
2006-09-17 16:27:27 · answer #2 · answered by Eric 2 · 0⤊ 0⤋
The actual formula is extremely complex. You'll be far better off either locating a loan calculator on the net, or picking up a business calculator like the TI Business Analyst.
If you have Microsoft Office, there's a built in loan amortization spreadsheet template for Excel that works very nicely and can accomodate periodic or random extra payments as well.
If you truly want to leave your head spinning, have a look here for the actual formulas: http://oakroadsystems.com/math/loan.htm#Sample2
2006-09-17 16:23:36 · answer #3 · answered by Bostonian In MO 7 · 0⤊ 0⤋
The last time i actually saw the formula, I was in school. Use a finance calculator
2016-03-27 06:36:28 · answer #4 · answered by ? 4 · 0⤊ 0⤋
this is a mortgage calculator but just change the amounts and it should do what your looking for it to do.
http://mortgages.interest.com/content/calculators/monthly-payment.asp
2006-09-17 16:13:11 · answer #5 · answered by ill_stated 1 · 0⤊ 0⤋
search for an amortization calculator
2006-09-17 16:11:43 · answer #6 · answered by c.arsenault 5 · 0⤊ 0⤋
Use this site.
http://ray.met.fsu.edu/~bret/amortize.html
2006-09-17 16:32:41 · answer #7 · answered by Thomas T 2 · 0⤊ 0⤋