; Derivation of the mortgage payment formula.
; Here are 3 related financial formulas that can be "read" into Mathomatic.

set finance ; Enable money mode.

; Compound Interest Future Value Formula:
fv1 = pv*(1+interest_rate)^n

; Annuity Formula:
fv2 = payment*(((1+interest_rate)^n-1)/interest_rate)
; Next we will combine these to produce the Amortized Loan Formula.
pause
; Set equal to produce the Amortized Loan Formula (Mortgage Payment Formula):
fv1 = fv2
eliminate all ; combine both formulas to produce the mortgage payment formula:
solve verify payment ; solve for payment per period, verifying the result:
; pv = present value
; fv = future value (maturity value)
; interest_rate = interest rate per period (1 = 100%)
; n = number of periods
pause End