what is the formula uset to calculate monthly payment for loans on the reducing balance?

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what is the formula uset to calculate monthly payment for loans on the reducing balance?

2006-10-18 09:55:14 · 3 answers · asked by Otis N 1 in Business & Finance ➔ Credit

3 answers

I just do it in Excel - functions - PMT

2006-10-18 10:02:27 · answer #1 · answered by Phoenix, Wise Guru 7 · 1⤊ 0⤋

Phoenix is the easiest way.

A more technical answer is 'Balance Due'/'Present Value of annuity for x period at y rate'.
x = number of payments remaining
y = interest rate per period. For monthly payments y = APR/12.

I could manually calculate the present value, but EVERYONE uses a computer and most accountant don't remember how to do it by hand.

2006-10-18 14:08:53 · answer #2 · answered by STEVEN F 7 · 0⤊ 0⤋

Principal *rate*time/360 (bank days per year)

2006-10-18 10:06:51 · answer #3 · answered by ANDREA K 2 · 0⤊ 0⤋