The Monthly Loan Payment (a.k.a. Amortization) calculator computes the monthly payment required to pay off a debt with a fixed interest rate over a period of time.
INSTRUCTIONS: Choose units and enter the following:
Monthly Payment (MP): The calculator computes the fixed monthly payment needed to payoff the loan in the amount of time. The payment is in U.S. dollars. However, this can be automatically converted to other currency units via the pull-down menu.
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. The formula for amortized payment is:
`MP = (P * (r/12)) / (1- (1+(r/12))^(-12*N))`