Calculating Mortgage Payments 563Pis the principal,Ris the interest rate, and Tis the term. Note that the ^symbol means
“to the power of.” In this formula, it is essential that the term and the rate be expressed in
the same time units. Thus, if the loan term is expressed in months, the interest rate must
be in months also. Because loans typically have rates expressed as annual rates, line 23
divides the annual rate by 12 to obtain the monthly interest rate. The actual payment cal-
culation is performed on line 27, and line 28 displays the answer.31 448201x-T&R6 8/13/02 11:19 AM Page 563