#### mortgage interest

```Hi, What is the correct excel formula to calculate the monthly interest on
an interest only mortgage of �100,000 at a rate of 3.75% per year where the
interest is calculated daily?
At present I use

=((C22*C19)/12)

where C22 is �100,000 and C19 is 3.75% but the result is not the same as
what I am being charged each month.
Thanks, Tracy

```
 0
11/26/2008 10:20:40 PM
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```Hi Tracy,

In part, the answer depends on how fequently interest is charged. Although it might be calculated daily, it might only be charged
monthly. Plus, some financial institutions calculate the daily & monthly interest on the basis of a year having 12 30-day months, so
interest for a 365 or 366 day year is calculated as if there were only 360 days (30 per month, even for February).

--
Cheers
macropod
[MVP - Microsoft Word]

"Tracy" <tracydavidson5000@yahoo.co.uk> wrote in message news:OsPDnUBUJHA.1172@TK2MSFTNGP03.phx.gbl...
> Hi, What is the correct excel formula to calculate the monthly interest on an interest only mortgage of �100,000 at a rate of
> 3.75% per year where the interest is calculated daily?
> At present I use
>
> =((C22*C19)/12)
>
> where C22 is �100,000 and C19 is 3.75% but the result is not the same as what I am being charged each month.
> Thanks, Tracy
>

```
 0
macropod1 (83)
11/27/2008 12:08:35 AM
```Hi,

=C22*((1+C19/366)^30)-C22     (for a 30-day month in 2008, a leap year)

(for a 31-day month, change the "30" to 31.  For a non-leap year, change the
"366" to 365)

Regards,
Ramachandran

"Tracy" wrote:

> Hi, What is the correct excel formula to calculate the monthly interest on
> an interest only mortgage of £100,000 at a rate of 3.75% per year where the
> interest is calculated daily?
> At present I use
>
> =((C22*C19)/12)
>
> where C22 is £100,000 and C19 is 3.75% but the result is not the same as
> what I am being charged each month.
> Thanks, Tracy
>
>
>
```
 0
11/27/2008 12:21:00 AM
```On Nov 26, 2:20=A0pm, "Tracy" <tracydavidson5...@yahoo.co.uk> wrote:
> What is the correct excel formula to calculate the monthly interest
> on an interest only mortgage of =A3100,000 at a rate of 3.75% per
> year where the interest is calculated daily?  At present I use
>=3D((C22*C19)/12)
> where C22 is =A3100,000 and C19 is 3.75% but the result is not
> the same as what I am being charged each month.

The answer might depend on the terms of your loan and the customs of
your jurisdiction (UK?).  You have the correct formula for the
"typical" interest-only loan.

It would help us help you if you provided the amount you are actually
being charged.  Otherwise we are just making wild-ass guesses about
the terms of the loan.

1. Is this a fixed-rate or variable-rate loan (specify which)?

2. Is the amount "charged each month" constant or variable (specify
which)?

3. Did the lender specify another rate -- usually called the effective
rate or APR -- which is based solely on the terms of the amortized
loan (i.e. principal, interest rate, loan term, calculation frequency)
excluding any up-front fees and payments?

4. Does your loan contract explain how the monthly payment is
calculated?

```
 0
joeu2004 (766)
11/28/2008 3:44:31 PM

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