Maximum borrowing capacity formula

[HEM19X]

Hi,

I am trying to use an excel formula to calculate the maximum amount that a person can borrow.

I have used the "PV" formula and while it gives an approximate amount I want something more exact.

The known variable factors are:

Loan Interest Rate.
Loan Term [number of repayments]
Surplus income. [Gross Income minus living expenses other loans etc]

Any assistance would be appreciated

Thanks

Hem

 

[Bill Rockenbach]

I find the PV function provides a max loan amount and when plugged into a payment formula (PMT) teh payment matches the surplus income

Excel Workbook
	A	B
1
2	Loan Interest Rate.	7.1%
3	Loan Term Years	30
4
5
6	Calculated Max Loan using surplus income
7	Surplus income.	1,428.36
8	Calculated Max Loan	212,543.46
9
10	Calculated Payment using Max Loan
11	Calculated Payment	1,428.36
12	Maximum Loan	212,543.46
Sheet1

 

[HEM19X]

Thank Bill,

Luv your work!!!!

Hem