{"id":5922,"date":"2014-10-16T19:30:52","date_gmt":"2014-10-16T19:30:52","guid":{"rendered":"http:\/\/www.oracletutoring.ca\/blog\/?p=5922"},"modified":"2014-10-16T19:30:52","modified_gmt":"2014-10-16T19:30:52","slug":"financial-math-mortgage-payments","status":"publish","type":"post","link":"https:\/\/www.oracletutoring.ca\/blog\/financial-math-mortgage-payments\/","title":{"rendered":"Financial math: mortgage payments"},"content":{"rendered":"

The tutor notices that financial math is more prominent in high school than it was twenty years ago.\u00a0\u00a0 Probably the change is good; let’s embrace it with a first look at mortgage payments. This topic comes up annually in tutoring.<\/h1>\n

Even before the advent of financial calculators, people had to calculate annuity payments, mortgage payments, etc.\u00a0 Such financial products have existed certainly since the industrial age – probably even before.<\/p>\n

The formula to calculate a mortgage payment isn’t that difficult to use, but probably outside the comfort zone of most consumers.\u00a0 The obvious question:\u00a0 How, in the 70s, did people calculate mortgage payments, when financial calculators – if they existed at all – were rare?<\/p>\n

The simple solution:\u00a0 they used mortgage tables.\u00a0 You looked up the interest rate and the term (in years) of repayment.\u00a0 The amount you’d arrive at would be the payment per thousand dollars of the loan.\u00a0 They were called mortgage tables, but you could use them for any loan.<\/p>\n

I’ve found a table I like the look of over at realsavvyrealestate.com.<\/a> Let’s put it to work:<\/p>\n

Example: Calculate the mortgage payment for this case:<\/p>\n\n\n\n\n\n
loan<\/td>\n300 000<\/td>\n<\/tr>\n
interest<\/td>\n6.5%<\/td>\n<\/tr>\n
term<\/td>\n25 years<\/td>\n<\/tr>\n
payment frequency<\/td>\nmonthly<\/td>\n<\/tr>\n<\/table>\n

On the table from realsavvyrealestate.com.<\/a>, we look down the left column to find 6.5%. From there, we look across to the 25 year column. The number we arrive at is 6.75207, which means that the payment is $6.75207 per thousand dollars of loan. The loan amount in this case is $300 000. Therefore, the monthly payment will be<\/p>\n

$6.75207×300=$2025.62<\/p>\n

Mortgage tables enable easy loan payment calculations. Many people from an earlier generation – myself included – can’t help but prefer them even now.<\/p>\n

Mortgage tables, of course, can’t handle the diversity of financial situations that a dedicated calculator can. In coming posts I’ll explore the use of a financial calculator – and perhaps even the option of doing the calculations using financial formulas.<\/p>\n

Cheers:)<\/p>\n

Jack of Oracle Tutoring by Jack and Diane,<\/a> Campbell River, BC.<\/p>\n","protected":false},"excerpt":{"rendered":"

The tutor notices that financial math is more prominent in high school than it was twenty years ago.\u00a0\u00a0 Probably the change is good; let’s embrace it with a first look at mortgage payments. This topic comes up annually in tutoring. …<\/p>\n

Financial math: mortgage payments<\/span> Read More »<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[256,259,258,257],"class_list":["post-5922","post","type-post","status-publish","format-standard","hentry","category-math","tag-calculating-mortgage-payment","tag-financial-math","tag-mortgage-payment-without-financial-calculator","tag-mortgage-table"],"_links":{"self":[{"href":"https:\/\/www.oracletutoring.ca\/blog\/wp-json\/wp\/v2\/posts\/5922","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.oracletutoring.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.oracletutoring.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.oracletutoring.ca\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.oracletutoring.ca\/blog\/wp-json\/wp\/v2\/comments?post=5922"}],"version-history":[{"count":22,"href":"https:\/\/www.oracletutoring.ca\/blog\/wp-json\/wp\/v2\/posts\/5922\/revisions"}],"predecessor-version":[{"id":5944,"href":"https:\/\/www.oracletutoring.ca\/blog\/wp-json\/wp\/v2\/posts\/5922\/revisions\/5944"}],"wp:attachment":[{"href":"https:\/\/www.oracletutoring.ca\/blog\/wp-json\/wp\/v2\/media?parent=5922"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.oracletutoring.ca\/blog\/wp-json\/wp\/v2\/categories?post=5922"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.oracletutoring.ca\/blog\/wp-json\/wp\/v2\/tags?post=5922"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}