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An amortization calculator is used to determine the periodic payment amount due on a loan (typically a mortgage), based on the amortization process.. The amortization repayment model factors varying amounts of both interest and principal into every installment, though the total amount of each payment is the same.
To encourage the return of books and to help fund the replacement acquisition of new books, libraries began assessing a fee on late books. [1] For example, when the Aberdeen Free Library in Scotland opened in 1886, borrowers were fined a penny a week for every week a book was held longer than a fortnight.
The fixed monthly payment for a fixed rate mortgage is the amount paid by the borrower every month that ensures that the loan is paid off in full with interest at the end of its term. The monthly payment formula is based on the annuity formula. The monthly payment c depends upon: r - the monthly interest rate. Since the quoted yearly percentage ...
For example, a nominal interest rate of 6% compounded monthly is equivalent to an effective interest rate of 6.17%. 6% compounded monthly is credited as 6%/12 = 0.005 every month. After one year, the initial capital is increased by the factor (1 + 0.005) 12 ≈ 1.0617. Note that the yield increases with the frequency of compounding.
The nominal interest rate, also known as an annual percentage rate or APR, is the periodic interest rate multiplied by the number of periods per year. For example, a nominal annual interest rate of 12% based on monthly compounding means a 1% interest rate per month (compounded). [2]
One reason for the popularity of flat rates is their ease of use. For example, a loan of $1,200 can be structured with 12 monthly repayments of $100, plus interest, due on the same dates, of 1% ($12) a month, resulting in a total monthly payment of $112. However, the borrower only has access to $1,200 at the very beginning of the loan.
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As well as a performance fee, a hedge fund will charge a management fee, typically calculated as 1.50% to 2% of the NAV of the fund, regardless of whether the fund has generated any returns for the investor. Hedge funds may also pay fees to administrators, prime brokers, lawyers, accountants and other service providers.