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Math Help - % payment loan

  1. #1
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    % 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.
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  2. #2
    Senior Member MaxJasper's Avatar
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    Lightbulb Re: % payment loan

    Quote Originally Posted by Wilmer View Post
    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
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  3. #3
    MHF Contributor
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    Re: % payment loan

    Yepper Max; I was surprised at its simplicity.
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