Loans & Mortgages
Monthly payment
The amortisation formula that spreads the loan into equal instalments.
The Formula
Payment = Loan x r / (1 - (1 + r)^-n)
The amortisation formula that spreads the loan into equal instalments.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| L | Loan amount | currency | Amount borrowed. |
| r | Monthly rate | rate | APR divided by twelve. |
| n | Payments | count | Term in months. |
What Each Symbol Means
Lcurrency
Loan amount
Amount borrowed.
rrate
Monthly rate
APR divided by twelve.
ncount
Payments
Term in months.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate a personal loan payment page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate A Personal Loan Payment, filed under Finance. Every number the guide produces comes from substituting into this one line.