how do you compute mortagage
To compute a mortgage, follow these steps:
1. Determine the loan amount: This is the total amount you are borrowing from a lender.
2. Determine the interest rate: This is the annual interest rate you will be charged on the loan amount.
3. Determine the loan term: This is the number of years that the loan will be repaid over.
4. Calculate the monthly interest rate: Divide the annual interest rate by 12 to get the monthly interest rate.
5. Calculate the number of monthly payments: Multiply the loan term by 12 to get the total number of monthly payments.
6. Use the formula: To calculate the monthly mortgage payment, you can use the following formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
where:
M = Monthly mortgage payment
P = Loan amount
i = Monthly interest rate
n = Number of monthly payments
7. Plug in the values: Substitute the loan amount, monthly interest rate, and number of monthly payments into the formula to calculate the monthly mortgage payment.
This calculation will give you the monthly mortgage payment amount that you need to pay to your lender. Keep in mind that this calculation does not include other costs such as taxes, insurance, or any additional fees.