M = payment amount
P = principal, meaning the amount of money borrowed
J = effective interest rate. Note that this is usually not the annual interest rate; see below for an explanation.
N = total number of payments
For example, if the loan term is 5 years and you'll be paying in twelve monthly installments each year, your total number of payments will be N = 5 * 12 = 60
Calculate (1+J)-N. First add 1+J, then raise the answer to the power of "-N." Make sure to include the negative sign in front of the N. If your calculator can't handle negative exponents, instead write this as 1/((1+J)N).[2]
In our example, (1+J)-N = (1.004167)-60 = 0.7792