What This Tool Calculates

Our multi-functional loan calculator handles 3 core scenarios:

Step-by-Step Instructions

1. Amortized Loans (e.g., Home Mortgage)

Input Fields:

• Loan Amount: ($100,000 example)
• Annual Interest Rate: (Current 30-yr avg: 6.25%)
• Term: Years + Months (e.g., 15 years + 6 months)
• Compound Frequency: Monthly (APR) for accuracy

Advanced Settings:

• Payment Frequency: Choose Monthly, Bi-Weekly (saves 5 years vs monthly), or Annual

Sample Calculation ($100K, 6%, 10 years):

Monthly Payment: $1,110.21  
Total Interest: $33,224.60 (33.2% of principal)  
Interest-heavy Phase: First 58.7% of payments  

2. Extra Payment Analysis

How It Works:

1. Enter additional monthly payment (e.g., $200)
2. See instant savings:
   • Time Saved: 1.9 years (23 months)
   • Interest Saved: $6,958.80
   • New Term: 8 years 1 month

Optimization Strategies:

• Front-load payments: Early extra payments reduce interest most
• $500/Month Rule: Cuts 30-year mortgage to ~22 years

3. Bond Valuation Mode

Example Calculation:

$10,000 bond maturing in 2 years  
Market rate: 5% → Present Value = $9,070.29  

Use Cases:

• Zero-coupon bonds
• CD investments
• Corporate debt analysis

FAQ

Q1: How accurate is this calculator vs. bank quotes?

*A: 98% match when using correct APR. Differences may come from:

• Loan origination fees
• Payment date adjustments
• Variable rate fluctuations*

Q2: Should I choose bi-weekly or monthly payments?

A: Bi-weekly (26 payments/year = 13 monthly payments) saves 5-8 years on a 30-year mortgage.

Q3: Does extra payment analysis include prepayment penalties?

A: No – check your loan terms for fees (typically 2% of balance). Deduct penalties manually from savings estimates.

Q4: Why does my interest seem higher in early years?

A: Amortization front-loads interest. E.g., Year 1 = 78% interest, Year 10 = 32% (viewable in detailed table).

Q5: Can I calculate adjustable-rate mortgages (ARMs)?

A: Currently supports fixed rates only. For ARMs, run separate calculations for each rate-adjustment period.