Loan Amortisation Schedule using R and Python

In this post, we will explain how you can calculate your monthly loan instalments the way bank calculates using R and Python. In financial world, analysts generally use MS Excel software for calculating principal and interest portion of instalment using PPMT, IPMT functions. As data science is growing and trending these days, it is important to know how you can do the same using popular data science programming languages such as R and Python.

When you take a loan from bank at x% annual interest rate for N number of years. Bank calculates monthly (or quarterly) instalments based on the following factors :

• Loan Amount
• Annual Interest Rate
• Number of payments per year
• Number of years for loan to be repaid in instalments

Loan Amortisation ScheduleIt refers to table of periodic loan payments explaining the breakup of principal and interest in each instalment/EMI until the loan is repaid at the end of its stipulated term. Monthly instalments are generally same every month

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