## Payment formula

Simple patterns, variables, the order of operations, simplification, evaluation, linear equations and graphs, etc.
Avoc
Posts: 1
Joined: Fri Mar 13, 2015 12:52 pm
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### Payment formula

I'm trying to find the right formula to calculate mortgage installment. If I use $a = j_0 r^n \frac{r-1}{r^{n+1}-r}$
i get results nearly the same as form online mortgage calculator, but not exactly the same.

Where is the problem?

FWT
Posts: 153
Joined: Sat Feb 28, 2009 8:53 pm

### Re: Payment formula

I'm trying to find the right formula to calculate mortgage installment. If I use $a = j_0 r^n \frac{r-1}{r^{n+1}-r}$
i get results nearly the same as form online mortgage calculator, but not exactly the same. Where is the problem?
We don't know what formula the calculator is using, what the variables in your formula stand for, what your results are, or what the inputs were. There's no way we can analyze whatever it is that you're seeing.

Alfred
Posts: 36
Joined: Fri Mar 14, 2014 6:44 pm
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### Re: Payment formula

Using 200,000 borrowed, over 25 years, rate 6% annual compounded monthly

P = Payment (?)
A = Amount borrowed (200000)
n = number of payments (25 * 12 = 300)
i = periodic (monthly) interest rate (.06/12 = .005)

Formula:
Let v = 1 / (1 + i)^n
P = Ai / (1 - v)

v = 1 / 1.005^300 = .22396....
P = 200000(.005) / (1 - .22396...) = 1,288.60