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I've been looking over some loan repayment statements, and I'm trying to work out:

  1. What the precentage interest is per month.
  2. How long it will be until the final amount reaches 0.
  3. Whether there is any modification to the percentage interest as time goes on.

Here are some figures that I would like to 'reverse engineer' to get my answer:

Start: -2,263.79
-29.76 = -2,293.55
+158.00 = -2,135.55
-28.88 = -2,164.43
+158.00 = -2,006.43

So as you can see, 158 is credited each month. A percentage of the remaining amount is then debited.

Please don't just tell me the answers. This is an exercise in improving my mathematics ability, so I'd like to know how to get to the answers.

I'm a regular user of other SE sites, but this is my first math.se post, so if you feel this question needs to be modified to stay 'on-topic' please let me know in the comments. Thanks!

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1 Answer

up vote 1 down vote accepted

Percentage interest rate per month is the small negative figure divided by the large negative figure e.g 29.76 / 2263.79 for month 1 and 28.88 / 2135.55 for month 2. rates per month can differ just because months have different numbers of days. also rates are usually quoted as a rate per year.

The wikipedia formula is useful. http://en.m.wikipedia.org/wiki/Mortgage_calculator

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