This equation computes the quarterly payments on a fixed rate.  

INPUTS

• r - the annual interest rate entered as a decimal value; i.e., enter 0.049 for a 4.9% interest rate
• n - the number of years of the loan term
• P - the principal amount borrowed.

Notes

This equation is defined to compute payments which will pay off the entire loan amount within some fixed period -- like the common 30 year mortgage term.

The entire balance of the loan includes the interest paid on the borrowed amount and is included in the monthly payment.

For example:

Assume you buy a home loan for $200,000 with a fixed yearly interest rate of 6.5% and plan to pay it off over 30 years, 

• the principal is P=200,000
• the yearly interest r (entered as  0.065)  will be calculated to a quarterly interest rate of quarterly rate = (0.065/4)
• the number of quarterly payments is n=30 years * 4 quarters/year = 120 payment periods

The fixed quarterly payment will then be calculated to equal  $3,799.04.