This Loan Balance equation computes the remaining debt (principal balance) on a fixed interest loan after a period of monthly payments have been made.
The input parameters are:
This equation might be simply used just to give a homeowner an idea how much there still is to be paid on their mortgage loan.
The equation would be useful in analysis of refinancing options, first computing with this equation how much will have to be refinanced at the present point into the loan. The output from this equation would then serve as the financed principal for calculating refinancing options.