Loan Balance Formula

To know the Loan Balance,  including the current payment, interest and term remaining РLoan balance calculator is used. To know the amount remaining to be repaid by the borrower in a certain time, then the Loan Balance formula is used. The banks provide a loan with easy repayment option that is called the equated monthly instalments. Equated monthly instalments are devised in such a way that the borrowers pays back to the lender (banks/financial institutions etc) without being heavy for the pocket and the interests is also taken care of.

Find loan balance formula below,

\(B=A(1+r)^n-\frac{p}{r}[(1+r)^n -1]\)

Where,
B = Balance Amount
A = Loan Amount
P = Payment Amount
r = Rate of Interest (compounded)
n = Number of time periods

Solved Examples

Question:

Find the balance loan after 1 year, when the original loan amount is Rs 100000, the monthly payment amount is Rs 900 and the annual interest rate of 4%.

Solution: 

Given Original loan amount A = 100000

B = Balance Amount

P = 900

r =4/1200 = 0.0033

n = 01 years = 12 months

Using the loan formula:

\(B=A(1+r)^n-\frac{p}{r}[(1+r)^n -1]\)

\(B=100000(1+0.0033)^{12}-\frac{900}{0.0033}[(1+0.0033)^{12} -1]\\ =100000\times 1.0403-272727.27(1.0404-1)\\ =104030-10990.9\\ =93039.1\)

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