##### Asked by: Mhammad Alvaredo

asked in category: General Last Updated: 19th June, 2020# How do you calculate an annual loan payment?

**payments**you'll make in the year (interest rates are expressed

**annually**). So, for example, if you're making monthly

**payments**, divide by 12. 2. Multiply it by the balance of your

**loan**, which for the first

**payment**, will be your whole principal amount.

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Keeping this in consideration, how do you calculate total interest paid?

Calculate your **total interest paid**. This is done by subtracting your principal from the **total** value of your **payments**. To get your **total** value of **payments**, multiply your number of **payments**, "n," by the value of your monthly **payment**, "m." Then, subtract your principal, "P," from this number.

Secondly, what is the total interest? The **Total Interest** Percentage (TIP) is a disclosure that tells you how much **interest** you will pay over the life of your mortgage loan. The **total interest** percentage is calculated by adding up all of the scheduled **interest** payments, then dividing the **total** by the loan amount to get a percentage.

Keeping this in consideration, what is the formula for calculating amortization?

**To calculate amortization**, start by dividing the loan's interest rate by 12 to find the monthly interest rate. Then, multiply the monthly interest rate by the principal amount to find the first month's interest. Next, subtract the first month's interest from the monthly payment to find the principal payment amount.

What is the formula of interest rate?

The simple **interest formula** allows us to calculate I, which is the **interest** earned or charged on a loan. According to this **formula**, the amount of **interest** is given by I = Prt, where P is the principal, r is the annual **interest rate** in decimal form, and t is the loan period expressed in years.