This service utilizes your local devices compute to store and calculate your information. We use custom logic in conjunction with standard formulas to help shape information in an understandable way.
Interest is calculated using your APR divided by the Period. Each account is different and your Loan and/or Cardmember Agreements will explain how they calculate interest. Here are two more common types of interest calculation.
Average Daily Balance Interest
$$Daily Interest = (Average Daily Balance) * {APR \over 365}$$Monthly Interest
$$Monthly Interest = (Statement Balance) * {APR \over 12}$$For this site, the Monthly Interest calculation is used solely. This means that your actual numbers will differ slightly.
Accounts with variable APRs will change depending on different variables such as the Banks Prime Rate and your payment history. This site does not consider any variable APR changes during calculations. The forecast generates is based off the current point in time.
Another factor in interest calculation is mixed balances. These can include interest free promotions, cash advances, and pay over time options. The option to define these mixed APRs is coming soon.
Each account calculates your monthly payment differently. Three common strategies are set minimum fixed amount, set percentage of balance, and percentage of balance plus interest. Cardmember Agreements will detail out which strategies they use and in what sequence. Some cards will have all three calculations considered and take the largest of the three. An example is:
| Balance | $5,000 | APR | 29% |
|---|
Set Minimum Fixed Amount
e.g. $48
1% + Interest
$$\mathbf{$170.83} = ($5000 * .01) + ($5000 * {.29 \over 12})$$ $$Payment =(Balance * 1\%) + (Balance * Monthly Interest)$$Set 2%
$$\mathbf{$100} = $5000 * .02$$ $$Payment = Balance * 2\%$$Depending on your balance, the payment calculations will fluctuate. Since interest calculation can be nuanced, this site defaults to 1%+Interest to ensure a payment will result in a decrease in balance.