This equation computes the quarterly payments on a fixed rate.
The quarterly payment is defined by the following inputs:
This equation is defined to compute payments which will pay off the entire loan amount within some fixed period -- like the common 30 year mortgage term.
The entire balance of the loan includes the interest paid on the borrowed amount and is included in the monthly payment.
For example:
Assume you buy a home loan for $200,000 with a fixed yearly interest rate of 6.5% and plan to pay it off over 30 years,
The fixed quarterly payment will then be calculated to equal $3,799.04.