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173 Replies to “Questions”

  1. Hi Bret,

    I am having trouble with an amortization schedule I’m hoping you can help with…
    loan amount- $117,000 at 6%
    monthly payment $750
    quarterly payment- $2500, all of this goes to the principal

    Can you help me or suggest how I go about calculating an amortization schedule and an effective interest rate for this?

  2. I am trying to figure out the following
    a new $15 million loan at 4.25% interest (monthly interest only payments for 3 years)
    then: monthly P&I payments for 7 years at 4.25% on a 30 year amortization schedule

    Question is what is the overall yield to the lender if I only receive $13,300,000 of the loan proceeds(($1,700,000 buydown)

    1. Hi, Rob. I have researched some typical commercial loan scenarios in an effort to make the calculator more useful in such situations, but I haven’t had time to spend on the calculator in quite a while. If I ever do get to work on it again, this is certainly a feature I will be targeting.

    1. Hi, MJay. The calculator is only designed for amortization, so it cannot handle an interest-only scenario. (Since principal is not reduced in an interest-only scenario, the payments would never end. A hand-calculator can calculate the interest payment for you.)

  3. Bret – thanks for the calculator. I use it often. One number I can’t seem to find the formula for is what you call the Debt Service Constant. I have several loans, and when I ran them through your calculator, I took note of the DSC’s. They seemed to correlate to the more effective use of a dollar towards principal. Would you mind sharing the calculation so I can use it going forward to decide what gets paid off faster? Thanks, Steve

    1. Hi, Steve. What I refer to as the Debt Service Constant is also known as a loan constant or mortgage constant. It is calculated as the ratio of the total amount of the annual payments (including principal and interest) to the principal borrowed, expressed as a percentage.

      As an example, if you borrowed $120K and your total payments annually are $12K, the Debt Service Constant would be 12K/120K, or 10%.

  4. Hi Bret,
    Thanks very much for this great tool. Today (July 8, 2014)the amortization schedule did not appear following calculations in Firefox. It still worked fine in IE.

  5. Hey Bret, I am a software developer and am currently working on an APR calculation for a client. Your calculator delivers the same results as their current system which uses a VB rate function, and I have been trying to achieve this, but have been unsuccessful thus far. I was wondering if you could explain the math behind being able to calculate the APR from the principal, the payments per year, the number of payments, and the periodic payment amount? Thank you for any help you can offer.

    1. Hi, Sean. As far as I know, there is no analytic solution for finding the APR: you can’t re-arrange the algebra to make it work. This is not an uncommon problem. The solution must be found numerically by guessing at the correct value for the APR, plugging it into the equation, evaluating whether the guess was too big or too small, and then revising the guess appropriately. One can keep doing this iteratively until the error of the guess is within some acceptable tolerance. This is how my calculator does it.

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