What is Repayment Calculator?
Computes amortized periodic loan installments where each equal payment covers interest and steadily reduces principal.
How to Use This Calculator
- Enter loan principal.
- Set interest rate and loan duration.
- View monthly repayment and total cost of financing.
The Mathematical Formula & Variables
PMT = P * [r*(1+r)^n] / [(1+r)^n - 1]
Step-by-Step Worked Example
Scenario: $10,000 borrowed at 9.0% for 3 years (36 months).
- r = 0.09 / 12 = 0.0075; n = 36.
- (1.0075)^36 = 1.308645.
- PMT = 10000 * (0.0075 * 1.308645) / 0.308645 = $317.996 -> $318.00.
Result: $318.00 / month
Frequently Asked Questions
How do extra payments accelerate loan payoff?
Extra payments bypass interest and go 100% directly toward reducing the principal balance, permanently lowering future interest calculations.