Simple Interest / From Contract Agreement

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wordquestion

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Payment shall be calculated based on an assumed level amortization over a 240 month period at 8 percent SIMPLE interest on a monthly payment ( principal and interest ) amount of $ 8.36 per thousand dollars of approved costs with the first such payment commencing on the first day of Jan. 2001. Thus, the payment would be equal to the outstanding principal balance of the said assumed amortization.

$ 527,000.00 is the amount of approved cost.

I need the amotization table or the amount paid off as of Nov. 2009.
 
wordquestion said:
I need the amotization table or the amount paid off as of Nov. 2009.
Click to expand...
That's a table from Jan/01 to Nov/09...
I need lotsa things too :shock:

Plus what you posted doesn't make much sense: 240 months, BUT 1000 / 8.36 = ~120 months.
 
It is a 240 month agreement ... the wording is from the contract ... I can't do anything about the wording ... I have tried several amortization calulators and get a different answer each time.
 
wordquestion said:
It is a 240 month agreement ... the wording is from the contract ... I can't do anything about the wording ... I have tried several amortization calulators and get a different answer each time.
Click to expand...
Well, don't you think the wording is WRONG then?

The wording states that 1000 / 8.36 = 240.
What would you do if someone asked you a question, saying that 20 / 5 = 8?
 
OK! Think I see what's going on. "Simple interest" (always a confusing term; Google it, you'll see!)
is quoted in the wording; however, a payment of $8.36 required to pay off $1000 over 240 months
means that the monthly rate is .08/12, hence an effective annual rate of 8.30%:
(1 + .08/12)^12 - 1 = 1.083 - 1 = .083 = 8.3%. ; if such is simple interest, so be it!

So, on the $527,000 the monthly payment is 527 * 8.36 = 4405.72 (as you stated)

The true payment is 4408.04 ; the 8.36 is a rounded figure; go here to see it:
http://www.realdata.com/ds/amort2.shtml

Enter 527000 in amount box, 240 in term-months box, 8 in interest rate box,
1 in first-payt-month box and 2001 in first-payt-year box.

You'll get the actual monthly payment, plus a FULL amortization schedule where you
can easily find your Nov/09 balance owing. Notice also the zero balance at end of month 240.

Was that problem given to you in math class, by a math teacher?
 
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