Calculating Compounding Interest Expense by Month

[ascheid]

I need to calculate monthly interest expense that is compounding. This shows the format that I am needing. So what is the interest expense for Jan, Feb, Mar, etc.

Amount	33600	Period (Years)	1
Interest Rate	.0903	Compounding Periods (Monthly)	12
Month	Interest Expense
Jan
Feb
March

<tbody>
</tbody>

 

[joeu2004]

The monthly interest rate depends on how the annual rate (9.03%) is stated.

If it is a simple rate (typical), the monthly rate is 9.03%/12.

If it is a compounded rate, the monthly rate is (1+9.03%)^(1/12) - 1.

However, you label the second column as "interest expense". If the "amount" is a loan, interest does not compound if payments are made on time.

Is this a loan, or is it a savings account?

If it is a loan, why do you think interest compounds?

For late payments, interest does or does not compound, depending on the terms of the loan agreement.

 

[joeu2004]

The monthly interest rate depends on how the annual rate (9.03%) is stated.
If it is a simple rate (typical), the monthly rate is 9.03%/12.
If it is a compounded rate, the monthly rate is (1+9.03%)^(1/12) - 1.

And then there's Canada (sigh).

<sigh>For mortgages (and only mortgages, AFAIK [1]), the annual rate is stated as compounded monthly semi-annually. "Say what?!" (smile)

<smile> So the monthly rate is:

(1 + 9.03%/2)^(1/6) - 1


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[1] Although I have seen this formula only for Canadian mortgages, I wonder if it is also true for Canadian HELOCs.</smile></sigh>