Finance & Business
Payment Calculator
Calculate loan payments and create detailed payment schedules with our comprehensive payment calculator.
Enter loan details to calculate payment schedule
Related to Payment Calculator
The Payment Calculator uses the standard amortization formula to calculate periodic payments for loans and mortgages. It takes into account the loan amount, interest rate, loan term, and payment frequency to determine your regular payment amount and create a comprehensive payment schedule.
The Amortization Formula
The calculator uses the formula: PMT = P * (r * (1 + r)^n) / ((1 + r)^n - 1), where:
- PMT is the payment amount
- P is the principal (loan amount)
- r is the periodic interest rate (annual rate divided by number of payments per year)
- n is the total number of payments
The calculator adjusts the periodic interest rate based on your selected payment frequency. For example, if you choose monthly payments, the annual interest rate is divided by 12. For weekly payments, it's divided by 52. This ensures accurate payment calculations regardless of your preferred payment schedule.
The calculator provides comprehensive results to help you understand your loan payments and total costs. The results include the periodic payment amount, total amount paid over the loan term, and total interest costs. The interactive amortization chart shows how your loan balance decreases over time.
Key Results Explained
Payment Amount: Your regular payment amount based on the chosen frequency.
Total of Payments: The total amount you'll pay over the entire loan term.
Total Interest: The total interest cost over the loan term.
Amortization Chart: Shows how your loan balance decreases with each payment.
The amortization chart helps visualize your loan payoff progress. The downward slope shows how your loan balance decreases over time, with each payment reducing the principal balance while covering the periodic interest charges.
1. How does payment frequency affect my loan?
Payment frequency affects how often you make payments and how interest is calculated. More frequent payments (weekly or bi-weekly) can result in slightly lower total interest costs compared to monthly payments, as you're reducing the principal more frequently.
2. Why does my total payment amount change with different payment frequencies?
The total payment amount may vary slightly with different payment frequencies because interest is calculated and compounded based on the payment period. More frequent payments generally result in slightly lower total interest costs.
3. Can I use this calculator for different types of loans?
Yes, this calculator can be used for various types of loans including personal loans, mortgages, auto loans, and business loans. It works for any loan with regular payments and a fixed interest rate.
4. How accurate are the payment calculations?
The calculations are highly accurate as they use standard financial mathematics and the industry-standard amortization formula. However, actual loan terms may vary based on lender-specific factors, fees, and rounding methods.
5. What is the scientific source for this calculator?
This calculator implements the standard amortization formula widely used in financial mathematics and banking. The formula is derived from the time value of money principles established in financial mathematics textbooks and is consistent with the methodology used by financial institutions worldwide. The calculations follow the compound interest formulas documented in financial mathematics literature, particularly in works such as "Mathematics of Finance" by Zima and Brown, and "Financial Mathematics: A Comprehensive Treatment" by Giuseppe Campolieti and Roman N. Makarov. The implementation adheres to the standards set by the Financial Industry Regulatory Authority (FINRA) for calculating loan payments and amortization schedules.