07-19-2006, 03:25 PM
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#1 |
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Greenhorn
Join Date: Jul 2006
Posts: 20
Rep Power: 6  |
Mortgage Calculation Question
What is the formula for calculating mortgage interest?
I tried the following, but for some reason this is over by ~$3.00/week according to my banks amortization calculator. Principle * Yearly Interest rate /365 days*7 days - Payment = Balance What am I doing wrong? |
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07-19-2006, 03:26 PM
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#2 |
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Greenhorn
Join Date: Jul 2006
Posts: 17
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First you need to know if that interest is APR or some other rate. Then you need to know whether it is compounded daily or weekly.
If compounded daily, it is a bit more complicated. And technically a year might be considered 365.25 days (to include leap years). |
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07-19-2006, 03:26 PM
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#3 |
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Piggy Bank
Join Date: Jul 2006
Posts: 96
Rep Power: 6 |
I used the PMT function in Excel to construct an amortization schedule, and compared to the mortgage company's schedule, it differs only by a few pennies after three years.
I guess I'd like to know why there's any difference at all, since the difference is in their favor!! Laughing |
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