Q: What formula does Quicken use for the Loan Planner amortization?

A: Quicken's Loan Planner and amortization features use the formulas shown here to calculate the payments, principal, and interest for your loan. The Refinance Planner uses this formula to calculate the proposed mortgage.

n = number of periods per year

y = total years

r = interest rate per period, given by this formula:

Similarly, if you enter the principal, Quicken calculates the payment amount as follows:

Payment schedules:

To calculate each line in your payment schedule, Quicken uses the following formulas to base each amount on the principal remaining (as shown in the Balance field on the previous line of the schedule):

Interest payment = r x Remaining principal

Payment against principal = Total payment - Interest payment

Note: If your loan company uses some other formula to calculate interest rate per period, Quicken's amortization calculations do not accurately reflect your loan.