""" Program to calculate the amortization amount per month, given - Principal borrowed - Rate of interest per annum - Years to repay the loan Wikipedia Reference: https://en.wikipedia.org/wiki/Equated_monthly_installment """ def equated_monthly_installments( principal: float, rate_per_annum: float, years_to_repay: int ) -> float: """ Formula for amortization amount per month: A = p * r * (1 + r)^n / ((1 + r)^n - 1) where p is the principal, r is the rate of interest per month and n is the number of payments >>> equated_monthly_installments(25000, 0.12, 3) 830.3577453212793 >>> equated_monthly_installments(25000, 0.12, 10) 358.67737100646826 >>> equated_monthly_installments(0, 0.12, 3) Traceback (most recent call last): ... Exception: Principal borrowed must be > 0 >>> equated_monthly_installments(25000, -1, 3) Traceback (most recent call last): ... Exception: Rate of interest must be >= 0 >>> equated_monthly_installments(25000, 0.12, 0) Traceback (most recent call last): ... Exception: Years to repay must be an integer > 0 """ if principal <= 0: raise Exception("Principal borrowed must be > 0") if rate_per_annum < 0: raise Exception("Rate of interest must be >= 0") if years_to_repay <= 0 or not isinstance(years_to_repay, int): raise Exception("Years to repay must be an integer > 0") # Yearly rate is divided by 12 to get monthly rate rate_per_month = rate_per_annum / 12 # Years to repay is multiplied by 12 to get number of payments as payment is monthly number_of_payments = years_to_repay * 12 return ( principal * rate_per_month * (1 + rate_per_month) ** number_of_payments / ((1 + rate_per_month) ** number_of_payments - 1) ) if __name__ == "__main__": import doctest doctest.testmod()