Scenario 1: Find the Amount of Payment | |
Interest rate R% is always a yearly figure. However, in most loan situations it is compounded monthly. In this calculator the Payment Amount P is calculated by the following formula where r is the adjusted equivalent interest rate For most loans, interests are compounded monthly and payments are also made monthly (m=q=12). r is then simplified to R/1200: Note that the number 100 is to convert the percentage value R% to decimal. |
Scenario 2: Find the Interest Rate | |
For given C, P and N, one can only solve the following equation for r by numerical means. Given the rather smooth behavior of this equation, this calculator employs the Newton-Raphson method with an educated initial guess: The annual interest rate R% is |
Scenario 3: Find the Number of Payments | |
This calculator figures out the Number of Payments N by the following closed-form expression: Notice that N has to be an integer, so the Payment Amount P might be slightly adjusted to satisfy this condition. |