I wrote a program that does a mortgage schedule. When comparing it with other online sites that are doing the same calculations I seem to be off $0.01 on every payment except the first. Here is an example:
- Loan Amount: $398,483
- Interest rate: 3.12
- monthly interest rate (mi): 0.0026 = (rate/12/1000)
- Length in months: 10
- Payment (c): 40,420.35
Payment schedule I came up with:
Payment 1:
Beginning Balance b1: $398,483
Interest: $1,036.06 = 398483 * 0.0026 = b1*mi
Principal: $39.384.29 = 40420.35-(398483* 0.0026) = c-(b1*mi)
Ending Balance: $359,098.71 = 398483 - 39384.29
And these are my steps
Pay- beginning
ment Balance Interest Principal Ending Balance (eb)
1 398,483.00 1,036.06 39.384.29 359,098.71 = eb1 -> b2
b1 b1*mi c-b1*mi b1-(c-b1*mi)
2 359,098.71 933.66 39,486.69 319,612.02 = eb2 -> b3
b2 b2*mi c-b2*mi b2-(c-b2*mi)
3 319,612.02 830.99 39,589.36 280,022.66 = eb3 -> b4
b3 b3*mi c-b3*mi b3-(c-b3*mi)
4 280,022.66 728.06 39,692.29 240,330.37
5 240,330.37 624.86 39,795.49 200,534.88
6 200,534.88 521.39 39,898.96 160,635.92
7 160,635.92 417.65 40,002.70 120,633.21
8 120,633.21 313.65 40,106.70 80,526.52
9 80,526.52 209.37 40,210.98 40,315.54
10 40,315.54 104.82 40,315.53 0.01
Findings
On payment 2 I have an ending balance of:
$319,612.02but other sites have an ending balance of:$319,612.01I'm not sure how:
$359,098.71 - $39,486.69 = $319,612.01
I assume I'm doing some of the math incorrect but i'm not sure what. However, my interest, principal are all correct it's just the end balance starting with payment 2 is incorrect and I'm not sure why?
Maybe someone can tell me what i'm doing wrong?
EDIT 1
Added the math for the first 3 payments to show the math i'm using. If needed I'll finish the rest of the payments later. However, you can get an idea of how I get the rest of the payments. Also like I stated, it's payment 2 is where it starts to become $0.01 off.