# How to calculate what i need to pay each month in a annuity type of loan?

Good or bad, how do get to the same number as the bank web calculator do with the following data:

Money loaned: 2 500 000
Interest: 3.5%
Effective interest: 3.6%
Fee (each payment): 50
Number of payments pr year: 12
Cost of establishment: 2000
Number of years: 25

How much i need to pay each payment: 12566 <- how did they figure this number?

This is not dollars, lol. Swedish kroner ;-)

They use an amortization table like can be found Here. The Forumula is not that complex

where:
A = payment Amount per period
P = initial Principal (loan amount)
r = interest rate per period
n = total number of payments or periods

You will need to add 50 to the A to account for the payment fee amount though.

• Chad, annual interest is nearly 90K. How did you get 3000 as payment? – JTP - Apologise to Monica Sep 6 '12 at 14:01
• I reformatted to make it easier to read and see that it is indeed monthly payments – user4127 Sep 6 '12 at 15:14
• I missed an edit or two. OP has 12/yr now. And you deleted reference to 3000. No prob. You got the magic equation. – JTP - Apologise to Monica Sep 6 '12 at 15:52
• @JoeTaxpayer - I read the original post as 50 payments per year(which I admit confused me) with a 3.6 percent per payment fee. The fee is 50 and there are 12 payments a year. I just added html breaks into the text of the question where the OP had CR's which formatted the question how the OP intended and cleared things up. – user4127 Sep 6 '12 at 18:25