What is the formula used to work out weekly repayments??

Hi Guys

Anyone know the formula required to work out weekly repayments when you have the principal, interest rate and loan term?

Any help is appreciated!!!

Clinton

If you're using MS Excel then it's

=pmt(rate,nper,pv,fv,type)

rate = interest rate per period
nper = number of payments
pv = loan amount
fv = zero if you are paying off the loan completely
type = 1 or 0, depending if the payment is at the start or end of each period (it doesn't make much difference to the result)

hope this helps

or you could use the excel template that is downloadable called amortization

The formula could probably be used in a calculator but you would need a financial calculator and would most likely it woudl have a PMT function similar to the excel function PMT and it would require you to carefully read the calculator's instruction booklet to work out how to input the required formula values.

The idea of using a mathematical formula over 20 years of calculations would be a tedious event without a financial calculator or Excel. Which can work it out in seconds rather than hours.

Comments are of a general nature and may not be relevant to your individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

Your other option is to ask your financier who should have those numbers on tap.

I am opinionated. Take me at face value, read between the lines.

http://www.reao.com.au/forum/entry.php?80-How-bright-is-your-agent

Thanks for your replies guys. Im a new member and a begginer to investing, Interested to know how most of you work out what your repayments etc vs your incoming rent to qualify potential cashflow?

Take say a ballpark interest rate of 5.5%.

Multiply your loan amount (normally purchase price + costs or say 110% of the purchase price) by 5.5% / 12 to give you the monthly interest payable.

Take 100% of the Gross rent and subtract say 8% managing agents costs and 1 1/12th of the annual rates body corporate contributions (if applicable), insurance etc.

Difference between the two will be the approximate shortfall / surplus cash flow for the particular deal.

This ignores any Depreciation, Building Write off or negaive gearing that maybe available.

Richard Taylor - richard@tayloredfinancialsolutions.com.au Tel: 07 3720 1888
Residential Mortgage Broker providing structured home loan advice for investors and owner occupiers all over Australia.
Thinking of buying your next investment property using a SMSF. Email me for a copy of my SMSF EBook.

Thanks, big help...