[loan principal × monthly interest rate ×( 1+ monthly interest rate) repayment months ]=[( 1+ monthly interest rate) repayment months-1]

2. For example:

Suppose that the borrower obtains a personal housing loan of 200,000 yuan from the bank, with a loan term of 20 years and a monthly interest rate of 4.2‰, and repays the principal and interest every month. According to the above formula, the sum of monthly principal and interest payable is 1324.33 yuan.

The above results only give the sum of the principal and interest payable each month, so it is necessary to decompose this sum of principal and interest. On the basis of the previous example, one month is the down payment, with the balance of the down payment of 200,000 yuan, the interest of 840.00 yuan (200,000× 4.2 ‰) and the principal of 484.33 yuan, and the bank loan is still 1995 15.67 yuan; The interest payable in the second phase is (1995 15.67×4.2‰).

Data expansion:

1. Equal principal repayment means that the lender distributes the principal every month and pays off the interest from the previous trading day to the repayment date. Compared with the matching principal and interest, the total interest cost of this repayment method is lower, but the principal and interest paid in the early stage are more, and the repayment burden is reduced month by month.

2. The average capital repayment method is a very simple and practical repayment method. The principle of the basic algorithm is to repay the loan principal in equal amount on schedule during the repayment period, and at the same time pay off the interest generated by the unpaid principal in the current period. Repayment methods can be monthly repayment and quarterly repayment. Due to the requirement of bank interest settlement practice, quarterly repayment is generally adopted (such as China Bank).

Source: Baidu Entry Average Capital Repayment Method