How to Calculate Loan Amortization
See your complete loan amortization schedule with monthly payment breakdown.
The Formula
loanAmount * (monthlyRate * (1 + monthlyRate)^numPayments) / ((1 + monthlyRate)^numPayments - 1)The loan amortization formula uses the mathematical relationship: loanAmount * (monthlyRate * (1 + monthlyRate)^numPayments) / ((1 + monthlyRate)^numPayments - 1). Each variable in the formula represents a measurable quantity that affects the final result.
Step-by-Step Method
- 1Identify all input values needed for the loan amortization calculation.
- 2Substitute your known values into the formula: loanAmount * (monthlyRate * (1 + monthlyRate)^numPayments) /.
- 3Perform the arithmetic operations in the correct order (PEMDAS/BODMAS).
- 4Check that your result has the correct units and is within a reasonable range.
- 5Verify using the interactive Loan Amortization Calculator to confirm your answer.
Related Topics
amortizationloan schedulepayoffprincipal vs interest
Use the Interactive Calculator
Skip the manual math — get instant results with our free Loan Amortization calculator.