Loans
Principal repaid before the balloon
The gap between what was borrowed and what is still owed, which is usually shockingly small.
The Formula
Principal repaid = P - B
The gap between what was borrowed and what is still owed, which is usually shockingly small.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| P | Principal | currency | The original loan. |
| B | Balloon payment | currency | The balance remaining. |
What Each Symbol Means
Pcurrency
Principal
The original loan.
Bcurrency
Balloon payment
The balance remaining.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate a balloon 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 Balloon Payment, filed under Finance. Every number the guide produces comes from substituting into this one line.