Loan Amortization Calculator

✖Rate of Interest is a percentage charged on the loan amount that you have borrowed.ⓘ Rate of Interest [roi]			+10% -10%
✖Principal Loan Amount refers to the original sum of money borrowed from the lender to purchase a property.ⓘ Principal Loan Amount [P]			+10% -10%
✖Monthly Payments in Year is calculated to keep the amount paid the same every month for the entire period of the loan.ⓘ Monthly Payments in Year [MP_Year]			+10% -10%
✖Time in terms of year refers to the classification of the calculated time for loan repayment.ⓘ Time in terms of year [T]			+10% -10%

✖The Monthly Payment is the amount a borrower is required to pay each month until a debt is paid off.ⓘ Loan Amortization [p]

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Formula

✖

Loan Amortization

Formula

`"p" = ("roi"*"P")/("MP"_{"Year"}*(1-(1+"roi"/"MP"_{"Year"})^(-"MP"_{"Year"}*"T")))`

Example

`"32267.19"=("0.1"*"1000000")/("12"*(1-(1+"0.1"/"12")^(-"12"*"3")))`

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Loan Amortization Solution

STEP 0: Pre-Calculation Summary

Formula Used

Monthly Payment = (Rate of Interest*Principal Loan Amount)/(Monthly Payments in Year*(1-(1+Rate of Interest/Monthly Payments in Year)^(-Monthly Payments in Year*Time in terms of year)))
p = (roi*P)/(MP_Year*(1-(1+roi/MP_Year)^(-MP_Year*T)))
This formula uses 5 Variables

Variables Used

Monthly Payment - The Monthly Payment is the amount a borrower is required to pay each month until a debt is paid off.
Rate of Interest - Rate of Interest is a percentage charged on the loan amount that you have borrowed.
Principal Loan Amount - Principal Loan Amount refers to the original sum of money borrowed from the lender to purchase a property.
Monthly Payments in Year - Monthly Payments in Year is calculated to keep the amount paid the same every month for the entire period of the loan.
Time in terms of year - Time in terms of year refers to the classification of the calculated time for loan repayment.

STEP 1: Convert Input(s) to Base Unit

Rate of Interest: 0.1 --> No Conversion Required
Principal Loan Amount: 1000000 --> No Conversion Required
Monthly Payments in Year: 12 --> No Conversion Required
Time in terms of year: 3 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

p = (roi*P)/(MP_Year*(1-(1+roi/MP_Year)^(-MP_Year*T))) --> (0.1*1000000)/(12*(1-(1+0.1/12)^(-12*3)))

Evaluating ... ...

p = 32267.1871938376

STEP 3: Convert Result to Output's Unit

32267.1871938376 --> No Conversion Required

FINAL ANSWER

32267.1871938376 ≈ 32267.19 <-- Monthly Payment

(Calculation completed in 00.004 seconds)

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Created by Vishnu K

BMS College of Engineering (BMSCE), Bangalore

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< 3 Loan Repayment Calculators

Loan Amortization

Go Monthly Payment = (Rate of Interest*Principal Loan Amount)/(Monthly Payments in Year*(1-(1+Rate of Interest/Monthly Payments in Year)^(-Monthly Payments in Year*Time in terms of year)))

Number of Months

Go Number of Months = log10((Monthly Payment/Interest Rate)/((Monthly Payment/Interest Rate)-Loan Amount))/log10(1+Interest Rate)

Monthly Payment

Go Monthly Payment = Loan Amount*((Interest Rate*(1+Interest Rate)^Compounding Periods)/((1+Interest Rate)^Compounding Periods-1))

Loan Amortization Formula

What is Loan Amortization?

Amortization is paying off debt amount periodically until the loan principal reduces to zero. The amount paid monthly is known as EMI, which is equated to monthly installments.
EMI has principal and interest components calculated by the amortization formula. Amortization calculation depends on the principal, the Rate of interest, and the time period of the loan. Amortization can be done manually or by Excel formula, for both are different.

How to Calculate Loan Amortization?

Loan Amortization calculator uses Monthly Payment = (Rate of Interest*Principal Loan Amount)/(Monthly Payments in Year*(1-(1+Rate of Interest/Monthly Payments in Year)^(-Monthly Payments in Year*Time in terms of year))) to calculate the Monthly Payment, The Loan Amortization is defined as a process of paying off a debt, such as a loan or mortgage, over a specified period of time through regular, equal payments. Monthly Payment is denoted by p symbol.

How to calculate Loan Amortization using this online calculator? To use this online calculator for Loan Amortization, enter Rate of Interest (roi), Principal Loan Amount (P), Monthly Payments in Year (MP_Year) & Time in terms of year (T) and hit the calculate button. Here is how the Loan Amortization calculation can be explained with given input values -> 64534.37 = (0.1*1000000)/(12*(1-(1+0.1/12)^(-12*3))).

FAQ

What is Loan Amortization?

The Loan Amortization is defined as a process of paying off a debt, such as a loan or mortgage, over a specified period of time through regular, equal payments and is represented as p = (roi*P)/(MP_Year*(1-(1+roi/MP_Year)^(-MP_Year*T))) or Monthly Payment = (Rate of Interest*Principal Loan Amount)/(Monthly Payments in Year*(1-(1+Rate of Interest/Monthly Payments in Year)^(-Monthly Payments in Year*Time in terms of year))). Rate of Interest is a percentage charged on the loan amount that you have borrowed, Principal Loan Amount refers to the original sum of money borrowed from the lender to purchase a property, Monthly Payments in Year is calculated to keep the amount paid the same every month for the entire period of the loan & Time in terms of year refers to the classification of the calculated time for loan repayment.

How to calculate Loan Amortization?

The Loan Amortization is defined as a process of paying off a debt, such as a loan or mortgage, over a specified period of time through regular, equal payments is calculated using Monthly Payment = (Rate of Interest*Principal Loan Amount)/(Monthly Payments in Year*(1-(1+Rate of Interest/Monthly Payments in Year)^(-Monthly Payments in Year*Time in terms of year))). To calculate Loan Amortization, you need Rate of Interest (roi), Principal Loan Amount (P), Monthly Payments in Year (MP_Year) & Time in terms of year (T). With our tool, you need to enter the respective value for Rate of Interest, Principal Loan Amount, Monthly Payments in Year & Time in terms of year and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

How many ways are there to calculate Monthly Payment?

In this formula, Monthly Payment uses Rate of Interest, Principal Loan Amount, Monthly Payments in Year & Time in terms of year. We can use 1 other way(s) to calculate the same, which is/are as follows -

Monthly Payment = Loan Amount*((Interest Rate*(1+Interest Rate)^Compounding Periods)/((1+Interest Rate)^Compounding Periods-1))

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