In loans, we often use the calculation method of average capital and equal principal and interest:
Calculation formula of average funds: monthly repayment amount = (loan principal ÷ repayment months)+(principal-accumulated amount of repaid principal) × monthly interest rate;
Calculation formula of equal principal and interest: monthly repayment amount = loan principal × [monthly interest rate× (1+monthly interest rate) repayment months ]/{[( 1+ monthly interest rate) repayment months ]- 1}.
Matching principal and interest repayment means that buyers repay the same amount of loans every month during the repayment period. Matching principal and interest repayment and matching principal repayment are different concepts. Although the monthly repayment amount in the initial repayment period may be lower than that in average capital, the interest paid in the end will be higher than that in average capital.
Matching principal and interest repayment method: the borrower repays the loan principal and interest in equal amount every month, and the monthly loan interest is calculated according to the remaining loan principal at the beginning of the month and settled every month. Because the monthly repayment amount is equal, in the initial monthly repayment of the loan, after excluding the monthly settlement interest, the loan principal is less; In the monthly repayment at the end of the loan, after deducting the interest settled on a monthly basis, the principal of the loan is more.
This repayment method actually takes up more bank loans and takes longer. At the same time, it is also convenient for borrowers to reasonably arrange their monthly life and financial management (such as renting a house, etc.). ) is undoubtedly the best choice for those who are proficient in investment and are good at "taking Qian Shengqian as their home".
Suitable for people with stable family income, especially those with less temporary income and greater economic pressure. Because although the monthly repayment amount is the same, the proportion of principal and interest is different. Interest accounts for a large proportion in the down payment, while the loan principal accounts for a relatively low proportion, which is not suitable for those who intend to repay the loan in advance.
What is compound interest?
Interest will be calculated according to the principal, and the newly obtained interest can also be calculated, so it is commonly known as "rolling interest", "snowballing" or "double interest". As long as the period of calculating interest is closer, the wealth will grow faster, and the compound interest effect will be more obvious with the longer the term.
The calculation of compound interest is to calculate the principal and the generated interest together, which is profitable.
The characteristic of compound interest calculation is that the sum of the principal and interest at the end of the previous period is taken as the principal of the next period, and the principal amount of each period is different when calculating. The formula for calculating compound interest is:
The present value of compound interest refers to the principal that must be invested now in order to reach a certain amount of funds in the future under the condition of calculating compound interest. The so-called compound interest, also called rolling interest in Galilee, refers to the method of making a new round of investment with interest after a deposit or investment is rewarded.
The final value of compound interest refers to the sum of the principal plus interest, after receiving the interest within the agreed period, and then calculating the interest and rolling it to the agreed period. Simply put, it is to deposit a at the beginning, take I as the interest rate, and deposit the sum of principal and interest after n periods. Formula: f = a * (1+I) n.
Because the inflation rate and interest rate are closely related, just like the two sides of a coin, the formula for calculating the final compound interest value can also be used to calculate the actual value of a specific fund in different years. Just change the interest rate in the formula into the inflation rate.