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Calculating a Loan Balance
To calculate how much principal is remaining on an outstanding loan, use this formula:
PV = PMT x (1 – (1 + IR)–NP) / IR
In this case, NP is the number of payments left on the loan. Here's the JavaScript equivalent:
PV = PMT * (1 - Math.pow(1 + IR, -NP)) / IR
Listing 2 shows you how to use this expression. The example uses a monthly payment of $200, an annual interest rate of 9%, and a remaining term of two years.
Listing 2: Calculating a Loan Balance
<script language="JavaScript" type="text/javascript">
<!--
function calculate_balance(PMT, IR, NP) {
var PV = PMT * (1 - Math.pow(1 + IR, -NP)) / IR
return round_decimals(PV, 2)
}
function round_decimals(original_number, decimals) {
var result1 = original_number * Math.pow(10, decimals)
var result2 = Math.round(result1)
var result3 = result2 / Math.pow(10, decimals)
return (result3)
}
var monthly_payment = 200
var interest_rate = 0.09
var term_remaining = 2
var loan_balance = calculate_balance(monthly_payment, interest_rate / 12,
term_remaining * 12)
alert("Monthly payment:\t$" + monthly_payment + "\n" +
"Annual interest rate:\t" + interest_rate * 100 + "%\n" +
"Term remaining:\t" + term_remaining + " years\n\n" +
"Remaining balance:\t$" + loan_balance)
//-->
</script>