Remaining Balance
Calculates the remaining loan balance after p payments have been made.
When to use: Use to find how much you still owe on a loan after some payments.
Formula
Variables
| Symbol | Name | Description | Unit |
|---|---|---|---|
| B | Remaining Balance | Outstanding loan balance | $ |
| PV | Original Loan | Original loan amount | $ |
| PMT | Payment | Periodic payment amount | $ |
| k | Interest Rate | Annual interest rate | % |
| p | Payments Made | Number of payments already made | integer |
Real-Life Examples
Example 1: Mortgage Balance
A $200,000 mortgage at 6% with annual payments of $19,264.68. Balance after 5 years?
Given
Step-by-Step
After 5 annual payments, $159,025.89 remains on the mortgage.
Example 2: Business Loan
$50,000 loan at 8% with $7,451.47 annual payments. Balance after 3 payments?
Given
Step-by-Step
$38,795.90 remains after 3 annual payments.
Frequently Asked Questions
Use this formula with the original loan amount (PV), your regular payment (PMT), the interest rate (k), and the number of payments you have made (p). The result is your remaining balance.
Early in a loan, most of each payment goes toward interest because the outstanding balance is large. As you make payments and the balance drops, more of each payment goes to principal, accelerating the balance reduction.
The remaining balance is the principal owed at a point in time. The payoff amount may include accrued interest since the last payment, prepayment penalties, or fees. For a same-day payoff right after a payment, they are typically the same.