In the example shown the formula in C10 is. Now the charges annual interest rate of 12 and the loan has to be repaid over a period of 10 years. We will use the formula B5 12 12797 12 for the number of years to complete the loan repayment.
Formula for the calculation of the duration of a loan with a given amount interest rate and annuity.
Using equation 8 the equation to get each guess from the previousguess is. The rate argument is the interest rate per period for the loan. 3 Assume you borrow 100000 at 6 for 30 years to be repaid monthly. Amortized Loan Payment Formula Calculate your monthly payment p using your principal balance or total loan amount a periodic interest rate r which is your annual rate divided by the number of payment periods and your total number of payment periods n.