Mike,

Those are the same first steps I took. I then used the total interest on the $97,500@12% and added it to the original $100,000 to get the total amount, which can be divided by 120 to get equal payments across the entire loan. The problem is the payment is no longer $833.33/month so the $97,500 is no longer a valid balance to start charging interest. I can perform that process over and over again until the payment doesn't change, and so far it looks like that's what I'll have to do. That's not too bad, I also have to calculate a payoff amount at any point during the loan. That's where things get really hairy and why a formula would be preferable to iteration.

>I would calculate it as follows:
>
>Payment for the first XX months = loan amount / loan term in months
>Payment for the remaining term = original loan less payments during XX months = current balance
>Calculate Payment() on current balance for remaining term.
>
>Example:
>A $100,000 loan taken out on January 15. Term 10 years, interest 12% per year, no interest first three months.
>
>First 3 payments would be due February, March and April 15 and would be $100,000 / 120 months = $833.33 per month
>
>On April 16th the loan balance is $97,500 ($100,000 -($833.33 * 3)
>
>Now calculate th payment on the $97,500 for 117 months (120 - 3) at 12% interest.
>
>>Anyone know how to calculate the payment on a loan where the first XX months are interest free and the remaining months are charged interest? PAYMENT() doesn't work in that situation. I found a good site on loan calculations at http://oakroadsystems.com/math/loan.htm, but it doesn't cover that scenario.
>>
>>Thanks.