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The Loan Payment per Month calculator computes the monthly payment amount, including principal and interest, on a fixed interest loan that, like most standard loans, compounds interest monthly. This equation can be used to compute payment amounts for car loans and other standard personal loans.
INSTRUCTIONS: Choose units and enter the following:
- (L) Loan Amount is the Principle loan amount
- (i%) Interest Rate is the annual interest rate percentage
- (n) Duration is the duration of the loan (n). The default unit is Months, but you can toggle to other input units such as years or weeks. All durations are automatically converted to months for use in this formula.
Loan Payment per Month (LP): The payment amount is returned.
The Math / Science
This equation is based on the formula: `L*[i*(1+i)^n] / [(1+i)^n - 1]`, which is equivalent to: `P = (r(PV)) /(1-(1+r)^-n)`
The interest term is divided by 12 in this formula to allow the user to enter the interest rate as a percent and the number of periods in months.
