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I am trying to make a calculation for a monthly and biweekly - INTEREST ONLY.

My Values: Loan: 30,000 Annual Rate: 2.99% Term 2 Years, 4 Months

Calculation: 2 Years 4 Months = 2.33 Years Monthly

Interest_Per_Year = 30,000 * ((2.99 / 100) * 2.33) / 2.33
Total Interest = Interest_Per_Year * (2 years + ( 4 Months / 12)
Monthly Payments = Total Interest / (2.33 * 12)

Bi Weekly

BiWeekly = (Interest Rate / 100) / 26
TotalInterest = BiWeekly * Number Of Months
ByWeeklyPay = totalInterest / Number Of Months

Total Bi Weekly Interest = totalInterest * 2


My Answers: 
Monthly: $74.95
Total: $2691

BiWeekly: $34.5
Total: $2484

Can someone please verify if this is correct.

2 Answers 2

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Assuming 2.99% effective annual rate of interest.

s = 30000
i = 2.99/100

Here is the monthly interest calculation.

r is the periodic rate calculated from the effective annual rate.

The periodic interest is s r so the total interest is s r n.

n = 28
r = (1 + i)^(1/12) - 1
s r   = 73.7448
s r n = 2064.85

Here is the biweekly interest calculation, assuming 52.1775 weeks per year.

b = 52.1775/2
n = 2 b + b/3
r = (1 + i)^(1/b) - 1
s r   = 33.8978
s r n = 2063.48
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Your bi-weekly "total interest" calculation is off: the 26 payments isn't relevant since you're not multiplying the interest per year by 4/26 for the final part year (it's still 4/12 of a year, regardless of how many payments you make). It's also missing a closing bracket.

The rest seems fine, but you can simplify:

  • Interest per year = loan * annual rate = $30,000 * 2.99%
  • Monthly interest = Interest per year / 12
  • Fortnightly interest = Interest per year / 26
  • Number of months = 2*12 + 4 = 28
  • Total interest = Monthly interest * number of months
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  • I have updated my question for the bi weekly, please see!
    – HomieLife
    Commented Sep 8, 2018 at 4:38

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