Loan Payment Formulas

Below you will find descriptions and details for the 2 formulas that are used to compute loan payments.

Loan payment amount:

where PV is the present value of the loan (i.e., the loan amount) and PVIFA is the present value interest factor of an annuity.

Present value interest factor of an annuity:

where R is the periodic interest rate and N is the number of periods.

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