Maximum loan amount with a given annuity, interest rate and duration formula
Description of the Maximum loan amount with a given annuity, interest rate and duration formula
This formula allows us to calculate the maximum amount \( C \) which can be borrowed with a given loan duration \( N \), interest rate \( r \) and annuity \( m \).
Formula
\[ C = \frac{m \cdot (1-( 1+ \frac{r}{n})^{-N})}{\frac{r}{n}} \ \]
Symbols
\(C\ \)
Start capital
\(m\ \)
Annuity
\(n\ \)
Number of payments per year
\(N\ \)
Total number of annuities (number of years times number of payments per year)
\(r\ \)
Nominal annual interest rate