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#1
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Formula for calculating interest payments?
Hello
My first post to this news group. Please excuse a novice question but could someone please advise which formula I should use to calculate the monthly/fortnightly payments which would need to be made on an interest only loan. I have used PMT and IPMT but my results don't quite correspond with other online calculators. I really would like to be able to develop my own calculations in Excel and be confident the resultrs are reasonably accurate. Thanks for your advice. Jack |
#2
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On Mon, 14 Mar 2005 14:17:31 GMT, "Jack Shearer" wrote:
Hello My first post to this news group. Please excuse a novice question but could someone please advise which formula I should use to calculate the monthly/fortnightly payments which would need to be made on an interest only loan. I have used PMT and IPMT but my results don't quite correspond with other online calculators. I really would like to be able to develop my own calculations in Excel and be confident the resultrs are reasonably accurate. Thanks for your advice. Jack if it is an interest-only loan, then the payments would be given by the formula: =Interest_rate_per_period * Principal So if your interest is quoted as yearly but your payments are monthly, you would divide that number by 12. --ron |
#3
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Interest only means you are not paying down any principal. You are paying
only the interest charged in a period. Therefore you can't use the financial functions, because they all assume you will have the loan paid off by the end of the term. In your case, to calculate the monthly interest charge, use: =AnnualRate * Principal / 12 To calculate the fortnightly charge: =AnnualRate * Principal / 26 -- Regards, Fred Please reply to newsgroup, not e-mail "Jack Shearer" wrote in message ... Hello My first post to this news group. Please excuse a novice question but could someone please advise which formula I should use to calculate the monthly/fortnightly payments which would need to be made on an interest only loan. I have used PMT and IPMT but my results don't quite correspond with other online calculators. I really would like to be able to develop my own calculations in Excel and be confident the resultrs are reasonably accurate. Thanks for your advice. Jack |
#4
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Thanks guys.
Of course this is the method. Benn quite a while since I worked with figures and was looking for a complicated process. Well that's my excuse and I'm sticking to it. Jack "Jack Shearer" wrote in message ... Hello My first post to this news group. Please excuse a novice question but could someone please advise which formula I should use to calculate the monthly/fortnightly payments which would need to be made on an interest only loan. I have used PMT and IPMT but my results don't quite correspond with other online calculators. I really would like to be able to develop my own calculations in Excel and be confident the resultrs are reasonably accurate. Thanks for your advice. Jack |
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