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May 5th, 2014, 11:56 AM   #11
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Quote:
Originally Posted by Marko1011 View Post
But the APR is 5%, so the equivalent monthly rate is ((1.05)^(1/12) - 1)(100), not .05/12
THINK about it...
the montly factor by which the outstanding balance is multiplied
to get the month's interest is .05/12 = .00416666.....

The resulting effective annual interest rate = (1 + .05/12)^12 - 1 = .051162...
or ~5.1162%

Here's how it works (Bank statement format):
Code:
MONTH INTEREST       BALANCE
 0                          10,000.00
 1           41.67       10,041.67
 2           41.84       10,083.51
...
11          43.44       10,468.01
12          43.61       10,511.62  : 5.1162%
Anyway, does not "really" apply to your problem, since the interest
is PAID each month along with an extra 300.
The 1st payment is 1250 + 300 = 1550
The 1000th payment is 1.25 + 300 = 301.25
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May 5th, 2014, 11:32 PM   #12
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I clearly wasn't thinking straight, the calculator I used worked on a constant payment amount.

I think I agree with Denis, the monthly rate is 0.05/12, that seems to be how the banks work it, the scumbags, lol.
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May 6th, 2014, 06:08 AM   #13
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It's easy enough to "see"; 300 to principal HAS TO mean a payment
that exceeds the month's interest by 300:
Code:
MONTH PAYMENT   INTEREST    BALANCE
  0                                       300,000.00
  1     1,550.00     1,250.00     299,700.00
  2     1,548.75     1,248.75     299,400.00
  3     1,547.50     1,247.50     299,100.00
...and so on to month#1000

The whole thing is really silly...and has nothing to
do with usual financial formulas...
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