Loan Calculator
A loan is a contract between a borrower and a lender in which the borrower receives an amount of money (principal) that they are obligated to pay back in the future. Most loans can be categorized into one of three categories.
Amortized Loan: Paying Back a Fixed Amount Periodically
Use this calculator for basic calculations of common loan types such as mortgages, auto loans, student loans, or personal loans.
$1,110.21
$133,224.60
$33,224.60
| Payment # | Payment | Principal | Interest | Balance |
|---|
Deferred Payment Loan: Paying Back a Lump Sum Due at Maturity
$179,084.77
$79,084.77
| Year | Beginning Balance | Interest | Ending Balance |
|---|
Bond: Paying Back a Predetermined Amount Due at Loan Maturity
Use this calculator to compute the initial value of a bond/loan based on a predetermined face value to be paid back at bond/loan maturity.
$55,839.48
$44,160.52
| Year | Beginning Balance | Interest | Ending Balance |
|---|
About Loan Types
Amortized Loan
An amortized loan requires the borrower to make scheduled, periodic payments that are applied to both the principal and interest. Each payment reduces the principal balance, and over time, the interest portion of the payment decreases while the principal portion increases.
Common examples include mortgages, auto loans, and personal loans.
The formula used for calculation is:
Payment = P × [r(1+r)^n] / [(1+r)^n – 1]
Where:
P = Principal loan amount
r = Monthly interest rate (annual rate / 12)
n = Total number of payments (loan term in months)
Deferred Payment Loan
A deferred payment loan allows the borrower to receive funds now and repay the entire amount, including interest, in a single lump sum at the end of the loan term. No periodic payments are made during the loan term.
This type of loan is common in certain business financing and bridge loans.
The formula used for calculation is:
Future Value = P × (1 + r)^n
Where:
P = Principal loan amount
r = Annual interest rate
n = Number of years
Bond
A bond is a fixed-income instrument that represents a loan made by an investor to a borrower. The borrower agrees to pay back a predetermined amount (face value) at maturity, and may also pay periodic interest payments (coupons).
This calculator focuses on zero-coupon bonds, which don’t pay periodic interest but are issued at a discount to their face value.
The formula used for calculation is:
Present Value = FV / (1 + r)^n
Where:
FV = Face value of the bond
r = Annual interest rate
n = Number of years until maturity
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