![]() In contrast, as I showed previously, with 10%/12, the monthly payment is =PMT(10%/12,84,-20000) = 332.02, which does indeed round to 332.įinally, if you give use the URL for the online(?) "finance repayment calculator", we might be more helpful with fewer digressions and distractions. I do not believe that either of those alternatives applies because the calculated monthly payment is so different 332. In Canada, the monthly rate for mortgages per se is (1+10%/2)^(1/6)-1. It is also true of other kinds of loans in the UK and Canada, IIRC.īut in the UK and EU, the monthly rate for mortgages per se is (1+10%)^(1/12)-1. ![]() That is valid for mortgages in many places in the world. Note that I calculated the monthly rate as 10%/12. Please forgive the incessant responses, but I should mention one other issue, although I do not believe it applies. Then, the monthly payment would be 26552/71 = 373.97 (approx). On the other hand, if we assume that total interest is 6552, the total payments would be 6552 + 20000 = 26552. Lenders handle the "odd period" differently. That's 70 regular payments plus an "odd period". It only appears to change because we are using rounded amounts.)Īlternatively, with payments of 375, the number of payments can be calculated by =NPER(10%/12,375,-20000). (IMHO, the annual rate really did not change. In your second example, there seems to be some inconsistencies. Total interest is calculated by pmt*nper - pv. In your first example, the payment can be calculated by =PMT(10%/12,84,-20000). Second, we can never expect to duplicate a lender's calculation exactly, because we do not know how they round amounts, especially in an amortization schedule. If you want to say "we save x% in total interest", we would calculate newTotal/oldTotal - 1. So, the difference in total interest does not reflect a "difference relative to an interest rate" per se. ![]() At least, you have not provided anything to suggest that the interest rates are different. First, you are mixing up some terminology: the total interest changes, but presumably not the interest rate per se.
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