How to calculate Mortgage calculation

Question

I have this formula for Mortgage calculation and now i want loan amount value using with same formula.

Loan amount = Monthly Payment/ ((1 + Interest rate per annum/100) ^ Term of loan) * Term of loan * 12

For example
Interest rate per annum is : 1.09
Term of loan is : 30 years
Monthly Payment is : S$ 3,049.40

So how to get Loan Amount?

Any ideas or suggestions? Thanks.

Answer 1

How?

• Substitution (you're given all the values you need to completely fill in all quantities on the right hand side of the equation).
• Simplification of RHS.
• Calculation of RHS. The loan amount (the left hand side of the equation) equals the the right hand side, and when the right-hand side is evaluated using the given values, it will give you precisely what the loan amount is equal to.

$$\text{Loan amount}\; = \dfrac{\text{Monthly Payment}}{\left(1 + \dfrac{\text{Interest rate per annum}}{100}\right)^{\large \text{(Term of loan)}}} \times \text{Term of loan} \times 12 $$

$$\text{Loan amount}\; = \dfrac{3049.40}{\left(1 + \dfrac{1.09}{100}\right)^{30}} \times 30 \times 12$$ $$= 3049.4\times (1.0109)^{-30} \times 360 \approx 792996.01$$