On Thursday, April 4, 2013 2:19:41 PM UTC-5, joeu2004 wrote:
"Michael Marshall" wrote:

joeu2004 Wrote:

For the terms above, I used Goal Seek to determine that the initial

payment is about 4348.97, and the last payment is about 6200.59.



Note: I assume that the investment growth rate of 4% is an annual

yield when compounded monthly (the payment frequency). In other

words, the monthly growth rate is (1+4%)^(1/12)-1.

[....]

Are you sure you didn't make a typo because I am getting an initial amount

of �4328.97



No typo. The difference is explained in the footnote above.



Since I assume the investment growth rate is an annual yield (compounded

rate), the monthly growth rate is (1+4%)^(1/12)-1.



Apparently, "you" (tadPMT from tadxl.com) use a monthly growth rate of

4%/12.



The latter is incorrect because it results in an annual yield of about

4.0742% = (1+4%/12)^12-1.

One has to use annualized yield in calculating interest when a nominal annual rate is given.

So it all depends on your interpretation of the annual rate and in this case you assumed that 4% (in the example) is the annual yield when it may have been the nominal rate instead