## Remaining Balance on Loan

The formula for the remaining balance on a loan can be used to calculate the remaining balance at a given time(time n), whether at a future date or at present. The remaining balance on a loan formula shown is only used for a loan that is amortized, meaning that the portion of interest and principal applied to each payment is predetermined.

The term future value in the remaining balance formula may seem confusing, but the balance at any time after payments are being made is the future value in respect to the origination of the loan.

It is important, as with all financial formulas, that the interest rate per period and term relate to one another and to when the payments are made. With monthly payments, the rate would need to be the monthly rate and not the annual rate

## $$v[1+r{]}^{n}-p[\frac{[1+r{]}^{n}-1}{r}]$$

Here v=present value,p=payments,r=rate per payments,n=number of payments.

ENTER THE VARIABLES TO BE USED IN THE FORMULA