How are payments calculated?
The monthly payment for an amortizing loan is calculated using:
P = L × r1 - (1 + r)-n
where:
- P = monthly payment
- L = loan amount (Business Price minus Down Payment)
- r = monthly interest rate (annual rate ÷ 12 ÷ 100)
- n = total number of payments (years × 12)
If the interest rate is 0%, the payment is simply L / n.