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Does anyone know the formula used by the TSP in order to generate a loan amortization schedule? I am trying to break down my payments to show the amount of principle and interest paid for each pay period. I've tried creating formulas in Excel and also tried several online calculators. The problem is that both resulted in a different payment amount per period and the total interest paid on the loan did not match up.
Determining the monthly payment to account for interest requires a complicated formula shown below.A*is the monthly payment,*P*is the loan's initial amount,*i*is the monthly interest rate, and*n*is the total number of payments.Quote:
Originally Posted by blueroadster
Attachment 25682
the problem is that *i* is determined monthly by blackrock after close consultation with jacob lew and ben bernanke, and *P* is actually the outstanding loan amount at the time you calculate the ream (reamorization), which you can do 26 pay periods per year. there is a reason they call it *ream*.
the trick is to continue to ream while never actually reducing the principal, kind of like a perpetual annual deficit or a continuing resolution, which is really no resolution at all.
word. secret to the financial world right there. live it learn it love it. and keep refinancing, that is how you make money.
Is the calculator on the tsp.gov site inaccurate or unreliable for some reason?
It doesn't show how it is amoritized. I think BR wants to see the breakdown. I think I saw a post somewhere that basically spread everything out equally, but will have to research later.:cool:Quote:
Originally Posted by Sensei
I'm just not sure how the tsp.gov loan calculator actually works. For example:Quote:
Originally Posted by Sensei
https://www.tsp.gov/planningtools/loan/loan.shtml
TSP Loan Calculator Inputs:
Loan Amount: $10,000
Type: General Purpose
Repay Loan Over: 5 Years and 0 Months
Pay Schedule: Biweekly (Every 2 Weeks, 26 Times a Year)
Interest Rate: 2.250%
TSP Loan Calculator Results:
Repayment Frequency: Biweekly
Interest Rate: 2.250%
Payment Amount: $82.00
Number of Payments: 130
Total Interest: $660.00
Total Loan Cost: 10,660.00
Free Loan Amortization Schedule and Calculator
Loan Information:
Loan Amount: $10,000
Annual Interest Rate: 2.25%
Term of Loan in Years: 5
Payment Frequency: Biweekly
Payment Type: End of Period
Loan Results:
Biweekly Payment: $81.36
Rate (per period): 0.087%
Number of Payments: 130
Total Payments: $10,577.37
Total Interest: $577.37
As you can see, the resulting monthly payment and overall amount of interest paid on the loan is not the same; the TSP calculator result is a higher amount of interest charged.
"As you can see, the resulting monthly payment and overall amount of interest paid on the loan is not the same; the TSP calculator result is a higher amount of interest charged. "
If I remember correctly the last time I borrowed from my TSP account they rounded up to the next dollar. Shouldn't really matter since you are borrowing from yourself and repaying yourself.
It makes sense how the TSP calculator would round up each payment to the next dollar, but doing so would actually increase the interest rate itself. Where this does not make sense is that for the TSP loan I took out several months, my biweekly payments were not rounded up to the next dollar. In any event, I was able to create an amortization schedule for my loan simply by slightly increasing to the interest percentage so the resulting biweekly payment matches what I'm actually paying.Quote:
Originally Posted by Scout333