Bret Whissel Mortgage Calculator

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About Bret Whissel Mortgage Calculator (Formula)

principal loan amount, annual interest rate, and loan term using the following formula:

M=P[i(1+i)n(1+i)n−1]M = P \left[ \frac{i(1+i)^n}{(1+i)^n – 1} \right]

Formula Breakdown

  • M: Monthly mortgage payment.
  • P: Principal loan amount (in USD).
  • i: Monthly interest rate (annual interest rate divided by 12).
  • n: Total number of monthly payments (loan term in years multiplied by 12).

Example Calculation

Suppose you have the following inputs:

  • Principal Loan Amount: $200,000
  • Annual Interest Rate: 5%
  • Loan Term: 30 years

Using the formula:

  1. Convert the annual interest rate to a monthly rate: i=5100/12=0.004167i = \frac{5}{100} / 12 = 0.004167
  2. Convert the loan term to the total number of monthly payments: n=30×12=360n = 30 \times 12 = 360
  3. Calculate the monthly mortgage payment: M=200,000[0.004167(1+0.004167)360(1+0.004167)360−1]M = 200,000 \left[ \frac{0.004167(1+0.004167)^{360}}{(1+0.004167)^{360} – 1} \right]
  4. Simplify the calculation: M=200,000[0.004167(1.004167)360(1.004167)360−1]M = 200,000 \left[ \frac{0.004167(1.004167)^{360}}{(1.004167)^{360} – 1} \right]
  5. The final result: M≈200,000[0.004167×4.467744.46774−1]≈200,000[0.0186183.46774]≈200,000[0.005373]≈1074.18M \approx 200,000 \left[ \frac{0.004167 \times 4.46774}{4.46774 – 1} \right] \approx 200,000 \left[ \frac{0.018618}{3.46774} \right] \approx 200,000 \left[ 0.005373 \right] \approx 1074.18

In this example, the monthly mortgage payment would be approximately $1,074.18.

Understanding the Bret Whissel Mortgage Calculator formula helps borrowers estimate their monthly mortgage payments and plan their finances accordingly.

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