1. What is the Loan Repayment Formula?

The loan repayment formula calculates the fixed monthly payment required to repay a loan over a specified term, including both principal and interest components. This formula is standard for amortizing loans where payments remain constant throughout the loan term.

2. How Does the Calculator Work?

The calculator uses the standard loan repayment formula:

Where:

• \( PMT \) — Monthly payment (MMK)
• \( P \) — Loan principal amount (MMK)
• \( r \) — Annual interest rate (decimal)
• \( t \) — Loan term in years

Explanation: The formula calculates the fixed monthly payment needed to pay off a loan over the specified term, accounting for compound interest.

3. Importance of Loan Calculation

Details: Accurate loan calculation helps borrowers understand their repayment obligations, plan their finances, compare different loan offers, and make informed borrowing decisions.

4. Using the Calculator

Tips: Enter the loan principal in MMK, annual interest rate as a percentage (e.g., 5.5 for 5.5%), and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is included in the monthly payment?
A: The monthly payment includes both principal repayment and interest charges. In the early years, a larger portion goes toward interest.

Q2: How does loan term affect monthly payments?
A: Longer loan terms result in lower monthly payments but higher total interest paid over the life of the loan.

Q3: Are there any additional fees not included?
A: This calculator shows principal and interest only. Additional fees like processing fees, insurance, or late payment charges are not included.

Q4: Can I calculate partial year terms?
A: This calculator uses whole years. For partial years, you would need to convert to months (e.g., 2.5 years = 30 months).

Q5: Is the interest rate fixed or variable?
A: This calculator assumes a fixed interest rate throughout the loan term. Variable rate loans would require different calculations.