% payment loan

• Sep 9th 2012, 07:32 PM
Wilmer
% payment loan
As example, a \$1,000.00 loan is repaid with monthly payments being 3% of balance owing;
with interest at 1% per month, this is what the loan looks like after 2 payments:
Code:

```N    PAYMENT  INTEREST    BALANCE 0                        1000.00 1      30.00    10.00    980.00 2      29.40      9.80    960.40```
a = amount borrowed
i = monthly interest rate (.01 in above)
m = minimum pay't rate (.03 in above)
n = number of payments made

Gimme a formula that gives balance owing after n payments.
In terms of a,i,m,n , of course.
• Sep 9th 2012, 10:30 PM
MaxJasper
Re: % payment loan
Quote:

Originally Posted by Wilmer
As example, a \$1,000.00 loan is repaid with monthly payments being 3% of balance owing;
with interest at 1% per month, this is what the loan looks like after 2 payments:
Code:

```N    PAYMENT  INTEREST    BALANCE 0                        1000.00 1      30.00    10.00    980.00 2      29.40      9.80    960.40```
a = amount borrowed
i = monthly interest rate (.01 in above)
m = minimum pay't rate (.03 in above)
n = number of payments made

Gimme a formula that gives balance owing after n payments.
In terms of a,i,m,n , of course.

$P({n},{p},{i}){ = }1000 (1-p+i)^n$

$P[2,.03,.01] = 960.40$
• Sep 10th 2012, 05:10 AM
Wilmer
Re: % payment loan
Yepper Max; I was surprised at its simplicity.