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Use this form to calculate the periodic repayment of borrowedprincipal and interest incurred for a given time period and interestrate. The assumption of this calculator is that the regular payments(consisting of principal and interest) are equal, and that the firstinstallment is due one payment interval after the borrowing date.There may be one balloon payment which is assumed to occur one paymentinterval after the final regular payment. (Exempli gratia, aone-year loan repaid in monthly installments and a final balloonpayment would consist of 11 regular payments and one balloon payment.) The balloon payment also consists of principal and interest parts.

If you request an amortization schedule be shown, you can see how theprincipal and interest vary from payment to payment. There may besmall discrepancies between the amortization schedule and thesummarized calculations above the schedule. In calculating theschedule, principal and interest parts are rounded to the nearestpenny, while the summary calculations above the schedule come directlyfrom the analytic equation for amortization that I derived. Yourlending institution may use a different method of handling fractionalpennies. The final payment (or balloon payment) of the amortizationschedule is adjusted (up or down) so that the debt is liquidatedentirely.

If you are buying real estate, be sure that the loan amount(principal) is sale price of the property less the down payment. Forexample, property with a sale price of $100,000 which you might buywith 10% down ($10,000) would require a loan of $90,000.

Nota Bene: The payment amount for this calculator will onlyinclude principal and interest. But it doesn't stop there if you aretrying to determine what your monthly payment will be when buying realestate. In addition to P&I, other money may be collectedregularly by the bank or mortgage company to meet future payments ofproperty taxes, mortgage insurance, homeowner's insurance, or otherfees. This escrow payment is added on top of the monthly P&I, andis usually independent of the terms of the loan. Depending on thebank, you may be assessed a one-time escrow management fee at closing.

See common questions and answers in theFAQ.

For the math inclined, I have written down my derivation of the amortization equation. There's also a documentwhich shows how to calculate with a moratorium before the paymentschedule begins, and how to calculate an earlier payoff value.If you're trying to figure out the original parameters of anamortization schedule, maybe the math on obtaining the payment and interest rate will be helpful to you.If your curious about recent changes to the calculator, you maywant to read my blog, or instead, you may wishto return to my home page, or you may wantto e-mail me(bretatmetdotfsudotedu) about this program.

In early days of the personal computer industry, I finishedcollege with a degree in Computer Science. I financed some ofmy education and living expenses using credit cards (not wise,but it got me through), and once I had a job, I wanted to knowhow long it would be before I could liquidate my high-interestdebts. The web didn't exist then, so I went to the libraryfirst to look up equations for amortization. (Much as I lovebooks, it's harder to find things in them quickly, compared tothe web, especially since I wasn't really sure what I was lookingfor and didn't know the lingo.)

After some unsuccessful digging, I decided that I could probablyput to use some of the math I'd learned as requirements for myfreshly-minted CompSci degree, and I sat down to figure out theproblem. (So almost certainly, the math you'll find in the derivationabove isn't how the finance industry would describe things, butthe basic principles are the same.) Once the math was done, the programquickly followed. Since my first question was "how long will I pay?",not "how much will I pay?", the program was designed with thatflexibility in mind. With the program completed, I had a nice little toolthat helped to guide me out of credit card hell.

Skipping ahead to the 90s, the World Wide Web was in its nascentstages, and techno-geeks were starting to assert their presencein cyberspace. I began putting together my own personal biographical babble, and thought about what I could offer websitevisitors that might be useful. I immediately thought of thecalculator, and I re-wrote it to work with web protocols. Though Ipersonally found the calculator useful, I neverthought of it as anything more than a web curiosity.

Eventually I started receiving e-mail from people who were usingthe calculator: asking questions, asking for additional features,or just saying "thanks" for putting it out there, and I wasgratified. When search engines came along, my little calculatorstarted getting more and more use, and for some reason, itcontinued to be ranked highly.

Until 2008, the calculator ran on a webserver in theMeteorology Department atFlorida State University where I work.Since the university's function is to provide information and researchto students and the world at large, running the calculator usinguniversity resources was not at conflict with our institutionalmission (though one would certainly question what it has to do withMeteorology :-). However, the server on which the calculator had beenrunning for over a decade was being decommissioned, and the calculatorhad to move. Since the calculator gets a LOT more use now than whenit was first launched, I could no longer justify putting it on a newdepartment webserver, so I moved it to this off-campus website.

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