Comments on: How to Compute the Remaining Balance on a Loan http://allfinancialmatters.com/2006/06/14/how-to-compute-the-remaining-balance-on-a-loan/ A personal finance blog dedicated to discussing such topics as budgeting, asset allocation, 401K, IRA, cash flow, insurance, financial planning, portfolio management, and other areas in personal finance. Wed, 23 May 2012 21:07:11 +0000 hourly 1 http://wordpress.org/?v= By: Grant Green http://allfinancialmatters.com/2006/06/14/how-to-compute-the-remaining-balance-on-a-loan/comment-page-1/#comment-456020 Grant Green Sun, 06 Mar 2011 12:18:40 +0000 http://allthingsfinancialblog.com/?p=842#comment-456020 Melvin's equation as well as the one published are correct from a syntax point of view, as the second term [P/I*((1+I)^n-1)] is redundant to [P/I*(1+I)^n-1]as the proper order of operation in mathematical calculations are as follows: Starting from left to right the inner most parentheses must be calculated first from left to right with exponentiation first in the order they appear, followed by multiplication or division in the order they appear followed lastly by addition or subtraction in the order they appear.Thus 1+I must be calculated first followed by raising that result to the Nth power. Then going back from the left P/I is calculated followed by the multiplication the exponentiated previous result and last subtracting 1. The adding extra brackets does help those that are not familiar with the true order of operations in mathematics but a computer will yield correct and same answer every time for both equations. Melvin’s equation as well as the one published are correct from a syntax point of view, as the second term [P/I*((1+I)^n-1)] is redundant to [P/I*(1+I)^n-1]as the proper order of operation in mathematical calculations are as follows:
Starting from left to right the inner most parentheses must be calculated first from left to right with exponentiation first in the order they appear, followed by multiplication or division in the order they appear followed lastly by addition or subtraction in the order they appear.Thus 1+I must be calculated first followed by raising that result to the Nth power. Then going back from the left P/I is calculated followed by the multiplication the exponentiated previous result and last subtracting 1. The adding extra brackets does help those that are not familiar with the true order of operations in mathematics but a computer will yield correct and same answer every time for both equations.

]]> By: Melvyn Lim http://allfinancialmatters.com/2006/06/14/how-to-compute-the-remaining-balance-on-a-loan/comment-page-1/#comment-15310 Melvyn Lim Sat, 22 Jul 2006 21:16:38 +0000 http://allthingsfinancialblog.com/?p=842#comment-15310 Hi, there's actually a typo in the formula, although the example was computed correctly: For brevity, let's have A = amount borrowed P = payment I = i / (12 * 100) The formula as shown above is: A * (1+I)^n - [ P/I * (1+I)^n - 1 ] It should instead be stated as: A * (1+I)^n - [ P/I * ( (1+I)^n - 1 ) ] Hi, there’s actually a typo in the formula, although the example was computed correctly:

For brevity, let’s have
A = amount borrowed
P = payment
I = i / (12 * 100)

The formula as shown above is:

A * (1+I)^n – [ P/I * (1+I)^n - 1 ]

It should instead be stated as:

A * (1+I)^n – [ P/I * ( (1+I)^n - 1 ) ]

]]> By: Steve Power http://allfinancialmatters.com/2006/06/14/how-to-compute-the-remaining-balance-on-a-loan/comment-page-1/#comment-8148 Steve Power Sat, 17 Jun 2006 22:06:51 +0000 http://allthingsfinancialblog.com/?p=842#comment-8148 I don't know if it is appropriate to post a question in here. Please forgive me if this is a breach of etiquette, but I'm new to this and only discovered your blog this afternoon. I would be very grateful for a bit of advice. I'm 44 and would like to retire at 65. The problem is that I have student loans that total approximately $110,000 with an interest rate of 6.125% (the rate will go down to 5.125% in about two and a half years). I'm currently paying $740 per month and the loans should be paid off in about 28 years, more or less. I am also currently putting $600 per month into various mutual funds which I planned to use to supplement my retirement benefits and social security benefits (if there are any). Should I direct some of the money I'm putting into the mutual funds towards the principle of my studnet loan? I only make $64,000 per year so the $600 I'm investing is about all that I have left after paying living expenses. Thank you for your consideration. Steve I don’t know if it is appropriate to post a question in here. Please forgive me if this is a breach of etiquette, but I’m new to this and only discovered your blog this afternoon. I would be very grateful for a bit of advice.

I’m 44 and would like to retire at 65. The problem is that
I have student loans that total approximately $110,000 with an interest rate of 6.125% (the rate will go down to 5.125% in about two and a half years). I’m currently paying $740 per month and the loans should be paid off in about 28 years, more or less.

I am also currently putting $600 per month into various mutual funds which I planned to use to supplement my retirement benefits and social security benefits (if there are any).

Should I direct some of the money I’m putting into the mutual funds towards the principle of my studnet loan? I only make $64,000 per year so the $600 I’m investing is about all that I have left after paying living expenses.

Thank you for your consideration.

Steve

]]> By: Free Money Finance http://allfinancialmatters.com/2006/06/14/how-to-compute-the-remaining-balance-on-a-loan/comment-page-1/#comment-7724 Free Money Finance Fri, 16 Jun 2006 10:31:32 +0000 http://allthingsfinancialblog.com/?p=842#comment-7724 <strong>Star Money Articles for the Week of June 12</strong> Here are interesting posts and news this week from the MoneyBlogNetwork members and beyond: MightyBargainHunter details mortgages that outlive you. Five Cent Nickel loves Hampton Inn's 100% satisfaction guarantee. Blueprint for Financial Prosperity wa... Star Money Articles for the Week of June 12

Here are interesting posts and news this week from the MoneyBlogNetwork members and beyond: MightyBargainHunter details mortgages that outlive you. Five Cent Nickel loves Hampton Inn’s 100% satisfaction guarantee. Blueprint for Financial Prosperity wa…

]]> By: Mighty Bargain Hunter » Roundup for the week of 11 June 2006 http://allfinancialmatters.com/2006/06/14/how-to-compute-the-remaining-balance-on-a-loan/comment-page-1/#comment-7679 Mighty Bargain Hunter » Roundup for the week of 11 June 2006 Fri, 16 Jun 2006 07:38:54 +0000 http://allthingsfinancialblog.com/?p=842#comment-7679 [...] All Financial Matters elucidates how to calculate the remaining balance on a loan.  (Congrats on your mention on MSNBC.com!) [...] [...] All Financial Matters elucidates how to calculate the remaining balance on a loan.  (Congrats on your mention on MSNBC.com!) [...]

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