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    Amortization Calculation

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    anon_177735386
    This document discusses how to calculate the periodic payment amount for an amortized loan. It provides the formula for calculating the payment amount per period as a function of the principal, interest rate per period, and total number of periods. As an example, it calculates the monthly payment amount of $400.76 for a 5-year, $20,000 car loan with 7.5% annual interest rate.

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    Amortization Calculation

    Uploaded by

    anon_177735386
    63 views1 page
    This document discusses how to calculate the periodic payment amount for an amortized loan. It provides the formula for calculating the payment amount per period as a function of the principal, interest rate per period, and total number of periods. As an example, it calculates the monthly payment amount of $400.76 for a 5-year, $20,000 car loan with 7.5% annual interest rate.

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    Amortization Calculation 2222

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    This document discusses how to calculate the periodic payment amount for an amortized loan. It provides the formula for calculating the payment amount per period as a function of the principal, interest rate per period, and total number of periods. As an example, it calculates the monthly payment amount of $400.76 for a 5-year, $20,000 car loan with 7.5% annual interest rate.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    63 views1 page

    Amortization Calculation

    Uploaded by

    anon_177735386
    This document discusses how to calculate the periodic payment amount for an amortized loan. It provides the formula for calculating the payment amount per period as a function of the principal, interest rate per period, and total number of periods. As an example, it calculates the monthly payment amount of $400.76 for a 5-year, $20,000 car loan with 7.5% annual interest rate.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    Amortization Calculation

    Usually, whether you can afford a loan depends on whether you can afford the
    periodic payment (commonly a monthly payment period). So, the most important
    amortization formula is probably the calculation of the payment amount per period.

    Calculating the Payment Amount per Period

    The formula for calculating the payment amount is shown below.

    where

     A = payment Amount per period

     P = initial Principal (loan amount)

     r = interest rate per period

     n = total number of payments or periods

    Example: What would the monthly payment be on a 5-year, $20,000 car loan with
    a nominal 7.5% annual interest rate? We'll assume that the original price was $21,000
    and that you've made a $1,000 down payment.

    You can use the amortization calculator below to determine that the Payment Amount
    (A) is $400.76 per month.

    P = $20,000
    r = 7.5% per year / 12 months = 0.625% per period
    n = 5 years * 12 months = 60 total periods

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