![]() The Vest Pocket Real Estate Advisor by Martin Miles (Prentice Hall). Walo found the answer to the actual formula in the book: ![]() I didn't know the answer and in myĬalculators I find it by doing a binary search over the payment formula above. Many people have asked me how to find N (number of payments) given the This formula previously was not explicit enough!! The 1/q factor in there was to convert the number of periods into years. If you haveįinding the Number of Periods given a Payment, Interest and Loan Amount Internet are NOT programmers and still want to calculate their mortgages! So this page was dedicated more to the latter. Programmers will see how this makes a trivial little loop to code, but I have found that many people now surfing on the Step 4: Set P equal to Q and go back to Step 1: You thusly loop around until the value Q (and hence P) Step 3: Calculate Q = P - C, this is the new balance of Your monthly interest, so it is the amount of principal you pay for that month I will tell you the simple steps :Ĭalculate H = P x J, this is your current monthly interestĬalculate C = M - H, this is your monthly payment minus To calculate the amortization table you need to do some iteration 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 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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