A new bank offers simple loan terms for everyone as they just started. The interest is 3% APR and the loan duration is 10 years.
This mortgage calculator takes the user input for the loan amount and returns the following:
- How much the customer will pay back in total, including the principal.
- How much the customer will pay just in interest.
- How much the customer's monthly payment will be.
Equation for mortgage payments
M = P[r(1+r)^n/((1+r)^n)-1)]
- M = the total monthly mortgage payment
- P = the principal loan amount
- r = your monthly interest rate. Lenders provide an annual rate so divide that figure by 12 (the number of months in a year) to get the monthly rate. If your interest rate is 5%, your monthly rate would be 0.004167 (0.05/12=0.004167).
- n = number of payments over the loan’s lifetime. Multiply the number of years in your loan term by 12 (the number of months in a year) to get the number of total payments for your loan.