The amount of the periodic payment on a loan equals the compound interest factor (from the "amount to amortize $1 column) times the amount of the loan.
Mortgage Problem #1:
What is the monthly payment on a $100,000 loan for 15 years at 8% interest.
|1.||Using the 8% monthly table, locate the appropriate factor (the mortgage constant). This is usually column 6 and is labeled "Amount to Amortize $1", "Partial Payment", or "Mortgage Constant".|
|2.||Multiply the factor by the loan amount.|
|3.||Payment = Mortgage Constant x Loan Amount.|
Factor = 0.00955652
Payment = 0.00955652 x $100,000 = $955.65