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If I had to pay 14,000 with a 4% interest but I gave 6,000 down on March 2010 when that bill started, and its been 11 months since...and now I have a balance of 4,526 not including interest which i'm gonna pay off with my income tax this month, how much of interest will I be pending? to add to the balance.

Asked by kimaam at 6:19 PM on Feb. 13, 2011 in Money & Work

Level 4 (46 Credits)
• Why don't you just ask the company what the payoff amount is? ..Or are you afraid they're charging you more than they should?

Answer by Anonymous at 6:22 PM on Feb. 13, 2011

• They can not pro-rate out the interest rate... it would simply be the balance and any past interest owed!

I agree with previous poster, contact the company and just ask what is the "pay off" amount!

Answer by MommaClark3 at 6:30 PM on Feb. 13, 2011

• Its cause its not a company, its actually to my dad and stepmom, but I can't ask them cause my stepmom will add more to the balance cause all she cares about is the money...and the lawyer that attended us will just say whatever she tells her to say so I feel like I gotta know more than them so they won't take advantage of me.

Comment by kimaam (original poster) at 6:33 PM on Feb. 13, 2011

• 4% interest on the total amount is \$560....if you gave \$6000 right off the bat, then that souldn't have interest added to it...a company wouldn't add it.....so you should just be charged on the interest of the difference and the time that you didn't pay...so 4% of 4526 is \$181.04...and also, is this 4% a month??? I don't think Im understanding the question....

Answer by calliesmommie at 6:38 PM on Feb. 13, 2011

• You'd owe \$15.09 in interest. Assuming the interest rate is calculated monthly and the 4% interest rate is 4% APR.

I figured out what the future value of the current debt (\$4526) would be in one months time if it was growing at 4% APR. The number came out to be about \$4541.08667 so rounded up to \$4541.09 minus \$4526 and you get you're \$15.09.

That's assuming there are no fees, or anything weird like that. Hope that helps!

Answer by Erica_Smerica at 6:41 PM on Feb. 13, 2011

• yes...that makes sense...that's why I wasn't sure what the 4% was...APR or monthly...

Answer by calliesmommie at 6:45 PM on Feb. 13, 2011

Comment by kimaam (original poster) at 7:24 PM on Feb. 13, 2011

• Erica Smerica, I forgot to ask you if the 15.09 is the total of interest or if thats the interest amount thats added to every month?

and

calliesmommie, would 181.04 be the total?

Comment by kimaam (original poster) at 7:29 PM on Feb. 13, 2011

• Well if the principle is going down every month then the interest accumulated every month is also going to go down.. So \$15.09 would be for this month only assuming you pay more than \$15.09 this month.

Example: A \$1000 loan at 10% would mean you pay \$100 in interest that year. But once that loan is paid down to \$900- then you'd only have to pay \$90. Hope that makes sense.

But it does depend on the way the loan is calculated. Some loans have you pay all the interest up front. And some loans compound the interest daily. This one- I'm assuming only compounds the interest monthly and the 4% is the annual percentage rate (APR).

Answer by Erica_Smerica at 8:30 PM on Feb. 13, 2011

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