Calculating mortgage payments

(Paying back your student loans)

((1+monthly interest rate)^(T*12)

-1 )

Monthly interest rate *(1+monthly interest rate)^(T*12)

Loan *

((1+monthly interest rate)^(T*12)

-1 )

Monthly interest rate *(1+monthly interest rate)^(T*12)

Loan *

((1+monthly interest rate)^(T*12)

-1 )

Monthly interest rate *(1+monthly interest rate)^(T*12)

Loan *

Annual rate divided by months

(1+ )(T * 12)

(1+ ) - 1(T * 12)

( ratemonths) x

ratemonths

ratemonths

(1+ )(T * 12)

(1+ ) - 1(T * 12)

( ) xMIR MIR

MIR

MIR = Monthly Interest Rate

Here is a sample problem:

30 year mortgage loan

$60,000

annual interest rate of 12%, what is the monthly payment?

(1+ ---).1212

(1 + ) - 1.1212

(T * 12)

x

(T * 12)

( --).1212

(1+ ---).1212

(1 + ) - 1.1212

(T * 12)

x

(T * 12)

( --).01

(1+ ---)

(1 + ) - 1.1212

(T * 12)

x

(T * 12)

( --).01 .01

(1+ ---)

(1 + ) - 1(T * 12)

x

(T * 12)

( --).01 .01

.01

(1.01)

(1 + ) - 1(T * 12)

x

(T * 12)

( --).01

.01

(1.01)

(1.01 ) - 1(T * 12)

x

(T * 12)

( --).01

(1.01 ) - 1

(1.01)x

(360)

( --).01

(T * 12)

(1.01 ) - 1

(1.01)x

(360)

( --).01

(360)

(1.01 ) - 1

(35.9496)x( --).01

(360)

(35.9496 ) - 1

(35.9496)x( --).01

(35.9496 ) - 1

.35.9496

Move the decimal 2 places left

35.9496 - 1

.359496

Subtract 1

34.9496

.359496

Divide the fraction

.010286

$60,000 * .010286 = $617.17

Monthly payments are:$617.17

End