Time for action – calculating the periodic payments

Suppose you have a loan of 1 million with interest rate of 10 percent. You have 30 years to pay the loan back. How much do you have to pay each month? Let's find out.

Call the pmt function with the values mentioned previously.

print "Payment", np.pmt(0.01/12, 12 * 30, 10000000)

The monthly payment would be shown as follows:

Payment -32163.9520447

What just happened?

We calculated the monthly payment for a loan of 1 million at an annual rate of 10 percent. Given that we have 30 years to repay the loan, the pmt function tells us that we need to pay 32,163.9520447 per month.