## What does it do?

This loan repayment calculator works out the regular payment (Pmt) needed to repay a loan (PV) over n periods if interest is compounded at a periodic interest rate i. The repayments are assumed to be made at the **end** of each period.

## Formula

The calculator uses the present value of an annuity formula and rearranges this to solve for the payment (Pmt).

Pmt = PV x i / (1 - 1 / (1 + i)^{n})

## Instructions

The Excel loan repayment calculator, available for download below, is used to compute the periodic loan repayment by entering details relating to the amount of the loan, interest rate and the number of periods. The calculator is used as follows:

### Step 1

Enter the amount of the loan(PV). This is the amount taken as a loan today, at the start of period 1.

### Step 2

Enter the interest rate (i). The interest rate should be for a period, so for example, if the payments are to be made monthly, then the rate should be the monthly rate. A nominal annual rate can be converted to a periodic rate by dividing by the number of periods in a year.

### Step 3

Enter the number of periods (n). A period can be any term (month, year etc), but must be consistent with the interest rate provided (see step 2). For example, if the loan is to be repaid monthly for the next 10 years, then the number of periods is 120 months.

### Step 4

The loan repayment calculator works out the periodic payment (Pmt) required at the end of each of n periods to repay a loan amount (PV) at a periodic interest rate of i.

## Loan Repayment Calculator Download

The loan repayment calculator spreadsheet is available for download in Excel format by following the link below.

The loan calculator is one of many used when preparing financial projections, discover another at the links below.

**Notes and major health warnings**

Users use this free loan repayment calculator at their own risk. We make no warranty or representation as to its accuracy and we are covered by the terms of our legal disclaimer, which you are deemed to have read. This is an example of a payments calculator that you might use when considering how to calculate payment on a loan. It is purely illustrative of a loan payment calculator. This is not intended to reflect general standards or targets for any particular business, company or sector. If you do spot a mistake in this loan payment calculator, please let us know and we will try to fix it.

## About the Author

Chartered accountant Michael Brown is the founder and CEO of Plan Projections. He has worked as an accountant and consultant for more than 25 years and has built financial models for all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a degree from Loughborough University.