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From: pmg@aplvax.UUCP (P. Michael Guba)
Newsgroups: net.invest
Subject: Re: amortization schedule?
Message-ID: <178@aplvax.UUCP>
Date: Mon, 11-Nov-85 10:17:16 EST
Article-I.D.: aplvax.178
Posted: Mon Nov 11 10:17:16 1985
Date-Received: Wed, 13-Nov-85 04:28:46 EST
References: <10800001@uicsl>
Reply-To: pmg@aplvax.UUCP (P. Michael Guba)
Followup-To: net.invest
Distribution: net
Organization: JHU/Applied Physics Laboratory
Lines: 53

In response to article <10800001@uicsl>:

|     Principle P, Interest (annual) I, Months (terms) N
|  
|  Q1?) What is the formula for calculating the amortization schedule?
|       I.e., given P,I,N,  how do I calculate the monthly loan payment $D.

The term Principal (P) is misleading to me so I have defined the following:

		PV = Present value of mortgage
		PMT = Monthly loan payment

		PMT = (PV * i/12)/[1 - (1 + i/12)**(-N)]

		where	i = I/100 and ** is the exponential operator.

|  Q2?) For payment, M (1<=M<=N), how do I calculate the amount of interest
|       (and/or principle) that makes up the loan payment of that month.
  
		PV = Present value of mortgage at month M in mortgage
		PMT = Monthly loan payment

		PV = (PMT * 12/i) * [1 - (1 + i)**(-(N - M + 1))]

		Interest portion of payment = PV * i/12 

		Principal portion of payment = PMT - (PV * i/12)

|  Q3?) If my loan payments are $D dollars per month and I pay $(D+X) on the
|       loan, can I calculate how much earlier the loan will be paid back?

		PV = Present value of mortgage at month after making
			extra payment X

		N = number of payments necessary to pay back loan

		N = ln[PMT/(PMT - (PV * i/12))]/ln[1 + i/12]

		where ln[] in the natural log function

|  Q4?) Is this the correct spelling of 'principle'?

The correct spelling is principal.

If you have any other questions send me mail.

Hope this helps,
Mike
-- 
P. Michael Guba			...seismo!umcp-cs!aplvax!pmg
JHU/Applied Physics Lab
Johns Hopkins Road
Laurel, Maryland 20707		(301) 953-6829