# FORMULA for a LOAN

• 03-21-2003
OneStiffRod
FORMULA for a LOAN
I need to know how to calculate loan payments...

like if i borrow \$100,000 at 6.5% APR for 15years- what is my per month charge? - I need to know the math formula or just some code since I need to do this via PHP or Javascript...

It seems like a simple problem but I get stuck on this... I've seen some payment forms in javascript and they use loops that are complicated to understand...

I need to know how much I will pay in total after 15years or whatever payment period lasts and I need to know the monthly bill...

Remember, I think that the APR is calculated on the principal owed so as you pay the principal is reduced and tapers off --

I don't want 100,000 * (1.065^15), that's not how loans work...
• 03-21-2003
alpha
the formula for monthly payments is:
Code:

```          A ------------------- (1 - (1 + I) ^ -N -------------------           I```
the numerator is A, and the denominator is below everything below A.

or
Code:

`A / ((1 - (1 + I) ^ ( -N)) / I)`
This is coming from my calculator, so readability is a bit tedious.

A is the loan amount.
I is the interest rate in decimal form divided by 12 (for monthly), i.e. .065 / 12 for 6.5%.
N is the number of months, i.e. 360 months for 30 yrs.

and yes, that is a negative N, just incase it is a bit small to read.

for total amount including interest, just multiply monthly payments by number of months.

edited for correctness of I.
• 03-22-2003
OneStiffRod
Thank you very much sir!!!
• 03-22-2003
alpha
You're welcome.