Loan Amortisation Formula

This calculator uses the amortisation formula to calculate the monthly repayments on a loan. Additional things such as down payment and additional monthly payment have been added to the calculations as an enhancement to this formula.

The Amortisation formula is used to calculate the periodic payment required to pay off a loan or mortgage over a specified time period, while accounting for both principal and interest.

The formula for calculating the Amortisation payment is:
A = P * (r*(1+r)^n)/((1+r)^n-1)
A = the Amortisation payment
P = the principal amount of the loan
r = the interest rate per period (usually monthly)
n = the number of payment periods

The formula calculates the payment amount by multiplying the principal amount by the interest rate per period and then dividing it by the present value of an annuity factor, which is calculated using the interest rate per period and the number of payment periods.

Each payment made using the Amortisation formula reduces the principal balance of the loan, which reduces the amount of interest paid over time. The formula is commonly used in mortgages and other types of loans to calculate the payment amount required to pay off the loan over the agreed-upon time period.

Disclaimer: The tools and information on this site do not constitute financial advice. Please do your own research before making any financial decisions.
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