Lesson Fixed Rate Mortgage Payment
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PrateekJain(0)
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<b>Fixed Rate Mortgage Payment Calculation</b> In <A href="fixed_Rate_mortgage.wikipedia">FRMs</a>, the <A href="interest-rate.lesson"> interest rate over the entire term of the <<A href="mortgage_basics_2.lesson">mortgage</a> is fixed, and repayments are made in equal installments in every period (usually monthly). The fixed monthly payment can be calculated as follows: Let: P = principal amount borrowed r = annual interest rate, compounded monthly N = term of the loan in years n = number of monthly payments = N*12 EMI = fixed monthly payment Then: <center> {{{EMI = (P*r) * (1+r/12)^n/((1+r/12)^n-1)}}} </center> For example, consider Principal = $100000, interest rate = 7%, and time period = 30 years = 360 months. The formula would then be <center> {{{EMI = (100000*0.07/12) * (1+0.07/12)^360/((1+0.07/12)^360-1)}}} </center> This would give the value of EMI as $665.3. Also see: <a href="calc-EMI.solver">Corporate Finance: Calculate Equal Monthly Installments (EMI)</a>
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