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*Suppose we are taking a loan for 8 percent annual interest rate and paying the amount in monthly, then the <math>r</math> value is 8%/12.
*Suppose we are taking a loan for 8 percent annual interest rate and paying the amount in monthly, then the <math>r</math> value is 8%/12.
*So we have to enter the <math>r</math> value as 8%/12 or 0.6667% or 0.006667 in to the formula as the rate.
*So we have to enter the <math>r</math> value as 8%/12 or 0.6667% or 0.006667 in to the formula as the rate.
*<math>np<math> is the total number of payment periods in an annuity.
*<math>np</math> is the total number of payment periods in an annuity.
*<math>pmt</math> is the payment made each period in the annuity.
*<math>pmt</math> is the payment made each period in the annuity.
*Normally, the payment is set over the life of the annuity and includes principal plus interest without any other fees.
*Normally, the payment is set over the life of the annuity and includes principal plus interest without any other fees.