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Saturday, September 20, 2008

Calculation of Monthly Mortgage Payments

With mortgages, we want to find the monthly payment required to totally pay down a borrowed principal over the course a number of payments. The standard mortgage formula is:


Monthly Payment = monthly payment 1
where P = Principal
i = Interest over Payment Frequency
n = No. of monthly payments

 

Similarly, the monthly mortgage payments can also be calculated by using the following formula:


monthly payment 2

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