Hum, I think you would want it to compound monthly. Since your capital is going down monthly, your interest charges would go down every month. If you compound it every 6 months, you end up paying for capital you already paid, 2,3,4 or 5 months before.
If, your capital never goes down then interest charges compounded monthly would be higher instead of semi0annually. Your interest would just add up to your capital, making your next interest charge higher.
Unless, I am mistaken, your mortgage payment is almost always higher then capital + interest cahrges for the month. Therefore, you capital is always decreasing. I have heard of some cases where the payment is lower, but I see how the math would work out (and how the guy would ever pay off his mortgage)
HERE IS THE NOTATION:
NOTATION:
I = Note percentage rate
i = Monthly percentage rate = I/12 (so that the APR = (1+i)^12 - 1)
T = Term in years
Y= I•T
X = ½ I•T = ½ Y
n = 12•T = term in months
L = Principal or amount of loan
P = monthly payment
Depends on the interest rate, how often interest is being compounded, and the length of time that the investment is left in the bank.
Compound Interest and Your Return How interest is calculated can greatly affect your savings. The more often interest is compounded, or added to your account, the more you earn. This calculator demonstrates how compounding can affect your savings, and how interest on your interest really adds up!
The Mortgage Interest Rate, just refers to the cost of borrowing money. The is the figure that you see most often advertized. The APR, or Annual Percentage Rate, takes into consideration many fees involved in your home buying including: interest, mortgage insurance, points, closing costs, etc.
Fixed Rate Mortgage vs. Interest Only Mortgage A fixed rate mortgage has the same payment for the entire term of the loan. Use this calculator to compare a fixed rate mortgage to Interest Only Mortgage.
An online website called Bankrate provides a mortgage calculator for interest only. 'Good Mortgage' and 'Mortgage Calculator' also are good places to find a mortgage calculator for interest only.
Assuming that the interest rate is 9.75% per year, the answer will depend on how often the interest is compounded.
14.651
If every six months the capital earn 10% interest which is compounded, at the end of 5 years, the interest will be 31875. If the annual interest rate is 10%, it makes no difference how often it is compounded. The six monthly interest rate is adjusted - to 4.88% rather than 5% - so that the total interest for a year is 10%.
That depends on how the interest works.Is it simple interest ? Is it compound interest ?If compound, then how often is it compounded ?8% simple interest turns $2 into $40 in 237.5 years .8% compound interest, compounded quarterly, does the job in 37.8 years .As you can see, it makes quite a difference.
If compounded, interest = 81.244 and balance = 456.245 If not compounded, interest = 75 and balance = 450
Yes.
It makes a difference how often the interest is compounded, and you haven't given that information. If it's compounded annually, then your 10,000 becomes 12,762.82 after 5 years. If it's compounded quarterly, then it becomes 12,820.37 . If it's compounded "daily", then it becomes 12,840.03 . If it's "simple" (uncompounded) interest, then 10,000 swells to a full 12,500 in 5 years.
Depends on the interest rate, how often interest is being compounded, and the length of time that the investment is left in the bank.
A fixed mortgage is a type of loan where the rate of interest stays the same. Other mortgages' interest rates often fluctuate, but the rate of a fixed mortgage is constant.
It is 0.833... recurring % if the interest is simple, or compounded annually. If compounded monthly, it is approx 0.797 %
If it is not compounded the interest would be 2000x10x.05=1000 If it is compounded then it is different.
Compound Interest = P(1+r/100n)(nt) P = Original Investment r = Interest Rate n = How often the interest is compounded per year t = Number of years Interest = 200(1+6/100)6 = 200(1.06)6 =$283.70