Loan repayment formula

[livewire1974]

Hi,
Does anybody have a formula to return the monthly repayments on a loan?

I am using this, but its not correct

this is where $term is in months + $interest = 9.8

$payment = ($interest*($loanamount/12))/(1-pow(($interest/12)+1,-1*$term));
$payment = $payment /12;


thanks

[AnthonySterling]

Here you go, this should work.

<?php

/**
 * @desc    Calculates the monthly payments of a loan
 *             based on the APR and Term.
 *
 * @param    Float    $fLoanAmount    The loan amount.
 * @param    Float    $fAPR            The annual interest rate.
 * @param    Integer    $iTerm            The length of the loan in months.
 * @return    Float    Monthly Payment.
 */
function calculateMonthlyPayments( $fLoanAmount , $fAPR, $iTerm )
{
    return ($fLoanAmount/$iTerm)+(($fLoanAmount/$iTerm)/100*($fAPR/12*$iTerm));
}

echo calculateMonthlyPayments( 100, 8.9, 12 );

?>

[reflash]

The formula you gave doesn't seem to work too well. On a loan of $60,000.00 at 9% for 30 years (360 payments), this formula gives a monthly payment of $616.67, but the actual monthly payment on that loan would be $482.77.

[reflash]

Took a while, but I got one that works:

function calcPmt( $amt , $i, $term ) {

$int = $i/1200;
$int1 = 1+$int;
$r1 = pow($int1, $term);
 
$pmt = $amt*($int*$r1)/($r1-1);

    return $pmt;

}

echo calcPmt( 60000, 9, 360 ); 

The loan amount ($amt) is in dollars, interest rate ($i) is in whole numbers (9 for 9% not .09) and the term of the loan ($term) is in months. You'll have to do the formatting of the output. I checked the formula in as written here with the values that I provided and it gives the right payment: $482.77.

[Roger_Silver]

The formula is a little bit more complicated than that. It would be:

Payment = P*(I/12) / (1-(1+I/12)^(-n))
Where P is the principal loan amount, I is the APR interest rate, and n is the number of periods.

The best way to figure out payments is to use a financial calculator or you can use Excel. The formula for use in Excel would be
=PMT(I,n,P,FV)

where P=principal, I=Interest per period, n=number of periods, FV=final value.

Good luck.

[Garyods]

Took a while, but I got one that works:

function calcPmt( $amt , $i, $term ) {

$int = $i/1200;
$int1 = 1+$int;
$r1 = pow($int1, $term);
 
$pmt = $amt*($int*$r1)/($r1-1);

    return $pmt;

}

echo calcPmt( 60000, 9, 360 ); 

The loan amount ($amt) is in dollars, interest rate ($i) is in whole numbers (9 for 9% not .09) and the term of the loan ($term) is in months. You'll have to do the formatting of the output. I checked the formula in as written here with the values that I provided and it gives the right payment: $482.77.

I've look for a good payment solution and this is simple and elegant, congratulations. I haven't tried it out yet, but it looks right. Typically the payment would be a neg number where this would appear to provide a positive number, but most expect a positive number anyway so I don't have to do a neg ot pos fix.

Thanx