Calculating


1
Calculating mortgage payments
Paying back your student loans
2
Loan
T12
1monthly interest rate
-1
3
Loan
T12
1monthly interest rate
-1
4
Loan
T12
1monthly interest rate
-1
Annual rate divided by months
5



1
x
T 12
- 1
6



1
x
MIR
MIR
T 12
- 1
MIR
MIR Monthly Interest Rate
7
Here is a sample problem
30 year mortgage loan 60000 annual interest
rate of 12 what is the monthly payment?
8
T 12
1 ---
--
x
T 12
9
T 12
1 ---
--
.01
x
T 12
10
T 12
1 ---
--
.01
.01
x
T 12
11
T 12
1 ---
--
.01
.01
x
T 12
1 - 1
.01
12
T 12
1.01
--
.01
x
T 12
1 - 1
.01
13
T 12
1.01
--
.01
x
T 12
1.01 - 1
14
360
1.01
--
.01
x
T 12
1.01 - 1
15
360
1.01
--
.01
x
360
1.01 - 1
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35.9496
--
.01
x
360
1.01 - 1
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35.9496
--
.01
x
35.9496 - 1
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Move the decimal 2 places left
.35.9496
35.9496 - 1
19
.359496
35.9496 - 1
Subtract 1
20
.359496
34.9496
Divide the fraction
21
.010286
22
60000 .010286 617.17
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Monthly payments are 617.17
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End