# How to Use a Monthly Payment Function in Python (3 Examples)

You can use the following function in Python to calculate the monthly payments necessary to pay off a certain loan, given the initial size of the loan, duration of the loan, and annual interest rate:

```(rate/12) * (1/(1-(1+rate/12)**(-months)))*P
```

The following examples show how to use this function in different scenarios.

### Example 1: Calculate Loan Payments for Mortgage

Suppose a family takes out a mortgage loan for a house with the following details:

• Mortgage Amount: \$200,000
• Number of Months: 360
• Annual Interest Rate: 4%

We can use the following code to calculate the necessary monthly loan payment:

```#define initial size of loan, duration of loan, and annual interest rate
P = 200000
months = 360
rate = .04

#calculate monthly payment
(rate/12) * (1/(1-(1+rate/12)**(-months)))*P

954.8305909309076
```

The monthly loan payment is \$954.83. This is how much the family must pay each month in order to pay off the \$200,000 loan in 360 months.

### Example 2: Calculate Loan Payments for Car Loan

Suppose an individual takes out a loan for a car with the following details:

• Loan Amount: \$20,000
• Number of Months: 60
• Annual Interest Rate: 3%

We can use the following code to calculate the necessary monthly loan payment:

```#define initial size of loan, duration of loan, and annual interest rate
P = 20000
months = 60
rate = .03

#calculate monthly payment
(rate/12) * (1/(1-(1+rate/12)**(-months)))*P

359.3738132812698
```

The monthly loan payment is \$359.37. This is how much the individual must pay each month in order to pay off the \$20,000 loan in 60 months.

### Example 3: Calculate Loan Payments for Student Loan

Suppose a student takes out a loan for university with the following details:

• Loan Amount: \$40,000
• Number of Months: 120
• Annual Interest Rate: 5.2%

We can use the following code to calculate the necessary monthly loan payment:

```#define initial size of loan, duration of loan, and annual interest rate
P = 40000
months = 120
rate = .052

#calculate monthly payment
(rate/12) * (1/(1-(1+rate/12)**(-months)))*P

428.18316863206525
```

The monthly loan payment is \$428.18. This is how much the individual must pay each month in order to pay off the \$40,000 loan in 120 months.