This program runs fine, but the monthly payment it returns is totally off. For a principal amount of $400,000, interest rate of 11%, and a 10-year payment period, it returns the monthly payment of $44000.16. I googled the equation (algorithm?) for mortgage payments and put it in, not sure where I'm going wrong.
import locale locale.setlocale(locale.LC_ALL, '') def mortgage(principal, interest, n): payment = principal*((interest*(1+interest)**n) / ((1+interest)**n-1)) return payment principal = float(input("What is the amount of the loan you are taking out? $")) interest = float(input("What is the interest rate? (%) ")) / 100 n = float(input("How many years? ")) * 12 print print "Your monthly payment would be", locale.currency(mortgage(principal, interest, n))
The problem is in your interest rate used. You request the annual interest rate and never convert to a monthly interest rate.
r - the monthly interest rate, expressed as a decimal, not a percentage. Since the quoted yearly percentage rate is not a compounded rate, the monthly percentage rate is simply the yearly percentage rate divided by 12; dividing the monthly percentage rate by 100 gives r, the monthly rate expressed as a decimal.
I just tried this on my computer and dividing the interest rate by 12 calculated $5510/month which agrees with other mortgage calculators.