Payment Calculator (PMT)
The regular instalment is the amount you pay at equal intervals to fully repay a given sum over a chosen term. The calculator uses the standard PMT annuity formula — the same one behind consumer loan, lease and mortgage instalments. Enter the amount, the annual interest rate, the term and the payment frequency, and you immediately see the instalment, the total paid and the total interest over the period.
Formula and explanation
PMT = PV · r / (1 − (1 + r)−n)
where: PV = present value (the amount today), r = interest rate per period, n = number of periods, PMT = regular payment.
The PMT formula calculates the regular payment that fully repays a present value over n periods at a fixed rate. It is the same formula behind loan and leasing installments, and it also answers what regular withdrawal exhausts a saved amount over a period. For a full month-by-month breakdown, use the loan calculator.
Methodology
What the calculator computes
The PMT calculator answers one specific question: what regular payment fully repays a given amount over a chosen number of periods at a fixed interest rate. This is the core calculation behind every annuity schedule — a consumer loan, a car lease, an instalment purchase, a mortgage or a phased service contract. The defining feature of an annuity is that the payment stays the same throughout the term, while its internal split changes: at the start most of it is interest, and towards the end most of it is principal.
The same formula works in the opposite direction. If you already hold an accumulated sum and ask how much you can withdraw regularly until it is exhausted over a given period, the answer is again PMT. This is the standard way to plan withdrawals from an investment portfolio or a savings account after retirement.
Use the calculator when you know three of the four quantities — amount, rate, term — and are looking for the fourth, the payment. If you already hold an offer with a stated instalment, the calculator is a quick check of whether the advertised interest rate is consistent with it.
The formula and its variables
PMT = PV · r / (1 − (1 + r)^−n)
- PV — present value, that is the amount today: the loan principal, the financed part of a purchase, or the available capital that will be drawn down.
- r — the interest rate per period, not per year. For monthly payments this is the annual rate divided by 12; for quarterly payments, by 4.
- n — the total number of periods: the term in years multiplied by the number of payments per year.
- PMT — the regular payment being solved for, identical in every period.
The denominator (1 − (1 + r)^−n) is called the annuity factor. It expresses what a stream of n equal one-euro payments is worth today. Dividing the amount by this factor simply spreads the present value across all future payments, allowing for the fact that more distant payments weigh less. This is why extending the term lowers the payment but raises the total interest — you pay less at a time, but for longer.
The timing assumption matters too. The formula used here assumes payments at the end of each period (an ordinary annuity). If you pay at the start of the period, the instalment is slightly lower.
Worked example: a 30,000 € loan over 5 years
Assume an amount of 30,000 €, an annual rate of 7.5% and a 5-year term with monthly payments.
- Rate per period: r = 7.5% ÷ 12 = 0.625% = 0.00625.
- Number of periods: n = 5 × 12 = 60.
- Compute (1 + r)^n = 1.00625^60 ≈ 1.453294, so (1 + r)^−n ≈ 0.688094.
- Annuity factor: 1 − 0.688094 = 0.311906.
- Numerator: 30,000 × 0.00625 = 187.50 €.
- Payment: PMT = 187.50 ÷ 0.311906 = 601.14 € per month.
Total paid over the term: 601.14 × 60 = 36,068.31 €. Total interest is 36,068.31 − 30,000 = 6,068.31 €, roughly 20% on top of the amount borrowed.
Holding the amount, rate and term constant and changing only the payment frequency shows why more frequent instalments are cheaper — the principal falls earlier and less interest accrues on it:
| Frequency | Payment | Number of payments | Total paid | Total interest |
|---|---|---|---|---|
| Monthly | 601.14 € | 60 | 36,068.31 € | 6,068.31 € |
| Quarterly | 1,812.64 € | 20 | 36,252.89 € | 6,252.89 € |
| Annually | 7,414.94 € | 5 | 37,074.71 € | 7,074.71 € |
How to read the result
The payment returned by the calculator covers principal and interest only. The real monthly burden of a loan in Bulgaria is almost always higher, because management fees, life or property insurance, and sometimes a current-account maintenance fee are added on top. These costs are captured in the annual percentage rate of charge (APR), which by law must be stated in the contract. Compare offers on APR rather than on the nominal interest rate — two offers with the same rate can carry noticeably different APRs.
With a lease, pay attention to the residual value. If the contract provides for a balloon payment at the end, the financed amount is not fully amortised over the period, and a payment computed with a plain PMT will be higher than the actual one. In that case apply PMT only to the portion that genuinely amortises.
If the contractual rate is variable and linked to a reference index, the calculator payment holds only while that index stays put. A useful habit is to recompute the payment at a rate 1–2 percentage points higher, to see how much headroom your budget needs.
Limitations of the calculation
The calculator assumes a fixed rate for the whole term, equal payments and payment at the end of each period. It excludes fees, insurance and commissions, ignores any grace period on principal, does not support a residual or balloon value, and does not compute the effect of early repayment. Results are rounded to two decimals, so the final real instalment on a contract may differ by a few cents.
If you need a breakdown of each individual payment — how much is interest and how much is principal — as well as an early repayment simulation, use the loan calculator with an amortisation schedule.
Frequently asked questions
What is the difference between PMT and the loan calculator?
PMT gives only the regular payment, the total paid and the total interest, for any payment frequency — monthly, quarterly or annual. The loan calculator is specialised for monthly loans and adds a full year-by-year amortisation schedule, an interest-and-principal split for each payment, and an early repayment simulation. Use PMT for a quick estimate, and the loan calculator to analyse a specific offer.
Why is the bank offer higher than the payment I calculated?
The PMT formula covers principal and interest only. A real instalment usually also includes a management fee, life or property insurance, and sometimes an account servicing fee. These extra costs are reflected in the annual percentage rate of charge. If you enter the APR instead of the nominal interest rate, you will get a figure much closer to the real monthly burden.
How does the term affect the payment and the total interest?
Extending the term lowers the payment, because the same amount is spread across more instalments. Total interest rises, however, because the principal stays outstanding for longer. Shortening the term works the other way. Choosing a term is therefore a trade-off between the monthly cash flow you can carry and the total cost of the loan over the whole period.
Can PMT be used to plan withdrawals from savings?
Yes. Enter the accumulated sum as the present value, the expected return as the interest rate and the number of years over which you want to draw down, and the result shows the regular amount that exhausts the capital in exactly that period. Bear in mind that investment returns are not fixed and actual outcomes vary, so use a conservative return assumption.
What does payment at the end of the period mean?
The calculator assumes each instalment falls due at the end of its period, which is the standard for bank loans and most leases. Under schemes where payment is made at the start of the period (an annuity due), the instalment is slightly lower, because every amount is paid one period earlier. The difference is roughly equal to one period of interest.
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The calculators are for guidance only and do not constitute financial, tax or legal advice. Parameters reflect 2026 legislation and should be verified annually. For a specific case, book a consultation with our specialists.