The calculation of interest on bank loans

Matching the principal repayment method is a very simple calculation, a very practical way of repayment. Algorithm is the basic principle of the repayment period of time matching the return of loan principal, and at the same time period is not repaid by the return of the principal amount of interest. Way could be monthly and quarterly repayment of repayment. Its formula is as follows:

= Monthly amount of loan principal ÷ months of the loan period + (principal - has a total return of the principal amount) × on interest rates

If the 45,000 yuan loan, the loan period is five years, as an example:

Matching the return of the principal each month: 45000 ÷ (5 × 12) = 750

The first month of interest: 45000 × (5.58% ÷ 12) = 209.25

The first month of repayment amounted to 750 +209.25 = 959.25 yuan;

The first 12 months of interest: (45000-750 × 1) × (5.58% ÷ 12) = 205.76

The first 12 months of repayment amounted to 955.76 yuan = 750 +205.76

……

So, with the constant return of principal, not the late return of the principal amount of interest it less and less, the monthly repayment amount will gradually decrease.
The way in January 1999 launch, the banks gradually being adopted.

Relatively simple method of matching the principal and interest

= (45000 +45000 * 5.58% * 5) / (12 * 5) = 959.25