Loans & Debt
Standard monthly payment
The level payment that repays the balance over the term.
The Formula
Pmt = P x r x (1+r)^n / ((1+r)^n - 1)
The level payment that repays the balance over the term.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| P | Loan balance | currency | Amount owed. |
| r | Monthly rate | rate | Annual rate divided by twelve. |
| n | Months | count | Number of payments. |
What Each Symbol Means
Pcurrency
Loan balance
Amount owed.
rrate
Monthly rate
Annual rate divided by twelve.
ncount
Months
Number of payments.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate student loan payments 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 Student Loan Payments, filed under Finance. Every number the guide produces comes from substituting into this one line.