The Amortization calculator computes the payments on a loan based on the principal (P), interest rate per period (i), number of periods (t), and the payments per period (n).
INSTRUCTIONS: Choose the preferred curency units and enter the following:
Payment: The calculator returns the payment amount in U.S. dollars. However, this can be automatically converted to other currency units via the pull-down menu.
Amortization (a.k.a.Monthly Payment) calculates the payment required to pay off a debt with a fixed interest rate over a period of time.
This formula calculates the regular payment required to pay off a debt of a certain amount (P) at a fixed interest rate (r) over a period of time (t) with a number (n) of payments per period.
This formula is commonly used for home mortgages and other simple debt. It is typically used in a way were the periods (t) are in years, and the number of payments per period (n) is 12 for the number of months.
The word AMORTIZATION comes from the Middle English amortisen which means "to kill". In essence, this is the amount needed on a regular basis "to kill" a debt.