The APR is the amount of interest that you would pay if you held their money for a whole year. If you borrowed the £100,000 for a year, didn’t pay anything until the end of the year, and then paid it all off, then you would indeed be paying 20%, or £20,000 interest. However, since you are making payments, each month that goes by the interest charges decrease ...
Your mistake is that in your calculation of interest ("10%") you divided the total amount of interest paid by the original amount you borrow. However, you don't pay interest for the original amount borrowed, but for the amount you are still borrowing during the time interval for which the interest is due (e.g. every month).
And since the system assumes ...
then which monthly debt payment should you calculate?
I think the only legitimate answer to this question is, "it depends" (on the context). Why are you doing this calculation and what else is involved?
Generally, in a financial sense, debt means money a borrower owes a lender - it's a deferred payment, usually including interest, for some ...
which monthly debt payment should you calculate?
Since you are treating the CC as "slightly deferred spending" instead of "borrowing", I would not consider that as a debt payment.
(Note that I payoff my CC at end of month, not on the due date, because it's paying current spending. This simplifies my budget.)
You get to decide. If you want $100 to be split as $33.33, $33.33, $33.34, or $30, $30, $40, or whatever, it's your choice.
The bookkeeping app isn't (and shouldn't be) responsible for how you decide to split your invoices.
I wouldn't want my software to tell me that the extra cent must go to the third person, or that I must split a 3-item account as ...
Rent is a living expense, not a debt.
"Monthly debt" is a contradiction in terms.
Living expenses is the right word for new expenses that crop up every month, like the cable bill.
Debt is the total amount you owe, and it is not time-related; it's not a rate, so it can't be "monthly". Paying that large amount would instantly end the debt.
The 20/4/10 Rule, for anyone who has never heard of it before, says that for a car to remain affordable, the car buyer should have at least a 20% down payment, should take out a loan for a maximum of 4 years, and the loan payment and insurance premiums should be less than 10% of the buyer's income. It's not a bad rule of thumb (although I prefer the 100/0/0 ...
I can understand the spirit of the other answers that are drawing a distinction between money that's accruing interest and money that's not. You swipe your card, your bank pays the merchant $25, the merchant gives you lunch, you owe your bank $25. That's a $25 debt. If your bank gives you a generous grace period before charging interest, that's fine, but ...
You are talking about two concepts using different terms. The standard financial terms when talking about inflation are "real" return and "nominal" return. "Nominal" return is just the actual mathematical return, not adjusted for inflation or anything else. "Real" return is your return after adjusting for inflation. Since the things you can do with your ...
With any loan, you save the most money when you pay as much as you can as early as possible. It doesn't matter if the loan is compounded monthly, daily, or any other period.
For example, let's assume that the loan you are talking about is compounded daily, and that these interest charges are added to your loan balance daily. (This is unusual.) Let's also ...
The 2.25% is an annual effective rate (same as APY)
e = 0.0225
Converting the annual effective rate to a monthly rate
r = (1 + e)^(1/12) - 1 = 0.00185594
Compounding the principal, with n = 24
10000 (1 + r)^n = 10460.2625
Compounding the payments, with d = 100 and payment at month-end.
fv = (d ((1 + r)^n - 1))/r = 2451.9379
These are some great answers & I don't want to take away from the detail they provide, but I saw in a comment you mentioned you were looking for a Google Sheets solution for this.
An easy Google Sheets solution for cumulative principal paid is to use the =CUMPRINC function.
$500,000 loan, 5% interest, 20 year term, determine the cumulative ...
The 40 credits thing simply determines eligibility. So, you would be eligible if you earned 40 or more credits. More than 40 doesn't change anything.
Eligible just means you get a check, it doesn't have a bearing on how much that check is for.
For example, let's assume further that you worked for 10 years (minimum to get 40 credits) and earned the average ...
I know this is an old post, but the answers given earlier are incorrect.
Annual Percentage Yield (APY) has very specific definition spelled out in Federal Regulation DD (Truth In Savings).
What APY is not (not Necessarily at least): a calculation of the interest you will actually earn.
What APY is: Minutia defined by Federal Reserve Reg DD assuming a 365 ...
A nominal rate annually compounded is equivalent to the effective annual rate.
See Effective interest rate calculation
Therefore the monthly rate m is calculated by
m = (1 + r)^(1/12) - 1
The future value of an annuity-due (meaning payment at period start) is
fv = (d (1 + m) ((1 + m)^n - 1))/m
d is the payment
m is the monthly rate
n is the ...
s = principal
r = periodic rate
d = periodic payment
n = number of periods
the basic loan formula is
s = (d - d (1 + r)^-n)/r
Rearranging for the number of periods
n = -(Log[1 - (r s)/d]/Log[1 + r])
The balance remaining in period x is
(d + (1 + r)^x (r s - d))/r
s = 100000
r = 0.05/12
d = 1000
n = -(Log[1 - (r s)/d]/Log[1 + r]) = ...
Let's define i = monthly interest. How to get monthly interest from yearly interest depends on how the yearly interest is given. If it's given as APR, then you can just divide the yearly interest by 12 (there is some complication as to whether there's compounding of interest within a month, but unless your rate is absurdly high, that should be small enough ...
For Simple Interest it may be useful to first find the monthly interest for a single rent payment (Rs. 10,000). Assuming a annual nominal rate of 6% (confirm that it is in fact annual) the interests for a single month of rent would be 10,000*6%/12 = Rs. 50.
I am assuming rent payments are due at the beginning of the rent period, therefore after 1 month you ...
When you take a loan, there will be some interest rate in percent in your contract, and there will be some more or less "interesting" (or confusing, or misleading) rules how the interest payments are to be calculated. These rules would make it possible to give you a deal that is worse than it looks. Or much worse than it looks.
That's why APR was invented. ...
You can't get an analytical solution for r. You need to solve it numerically, via some iterative method.
Here is the simplest iterative method I can think of. First, rearrange your equation to solve for one of the r's:
r = (1000/7253.93)*(1 - (1 + r)^(-9))
Now, since we can only solve for one r at a time, we rename the r on the right side to r_0 and the ...
The formula that "will determine what % of withdrawal [of the initial principal] will keep the withdrawal amount the same over a set time period or until the principal is exhausted" is
percentage = 100/number of years
i.e. with savings s = 500000
no. years n = 25
percentage = 100/n = 4
Check: annual withdrawal w = 0.04 s = 20000
At the end of each month, subtract the previous month's principal payment, and add 1/150 of the current principal as a separate interest payment. (1/150 = 8/100 * 1/12, or the annual percentage rate divided by 12 to get a monthly interest rate.)
Month Principal Principal payment Interest Total payment
Let's assume you mean 8% nominal annual interest, compounded monthly.
i = nominal annual interest, compounded monthly
r = monthly interest
s = principal
d = payment
n = number of months
i = 0.08
r = i/12 = 0.00666667
s = 66000
n = 5*12 = 60
d = r (1 + 1/((1 + r)^n - 1)) s = 1338.24
If the payments were to be equal, a monthly payment of $1338.24 ...
Let's say I bought a bond with $1000 face value that pays 5% a year for the next five years. And suddenly interest rates drop to say 4%. If you bought a $1000 face value bond paying 4%, that would be less valuable than my 5% bond. So if you want to buy my 5% bond, I won't sell it for $1,000, but say for $1,050, because it will pay five times $50 where a bond ...
It sounds like really the only reason you're finding the question posed
What is your total monthly debt payment (e.g. student loans, vehicles, credit cards, personal loans, etc.)?
confusing is revealed in the phrasing of this question's title,
Would the minimum payment or full CC amount be considered monthly debt?
The financial assessment is not ...
When you are asked that question (for example by a potential lender), they want you to use the minimum credit card payment amount.
How to Calculate Debt-to-Income Ratio (DTI Ratio):
Credit card payments (use the minimum monthly payment amounts not what you actually pay)
How to Calculate Your Debt-to-Income Ratio (and What It Means):
I'm not quite sure I understand what context your goal would be used in, but there are two approaches that come to mind.
Either you just state your goal is to reach a price of $80 and you are currently at $61, which means you are 61/80 = .7625 = 76% of the way to your goal.
Alternatively, if you want starting price factored in then, you could rephrase ...
NOTE: I am not a financial advisor but the question intrigued me and I have wanted to try to find something similar too.
Your modification would imply that you took all the eventual $X and invested in the beginning. So the CAGR is bound to mislead with that. I was looking into different mathematical series to be able to express this but that can be left to a ...