Welcome to Loans.
This week is loans. The flip side of savings: instead of money growing for you, money is growing against you on a balance you owe. By Sunday you'll be able to read a monthly payment, total cost, and total interest for any fixed-rate loan — auto, credit card, student, or mortgage.
The central formula is the amortization formula: M = P(r/12) / (1 − (1+r/12)−12t). Once you can read it, every loan in your life becomes a known quantity. Topic 3 was the math of growth; Topic 4 is the math of paying it back.
By the end of this week, you'll be able to:
- Compute monthly payments and interest costs of short-term loans such as auto loans or credit cards.
- Find the interest, the balance due, and the minimum monthly payment for loans.
- Analyze the various aspects of long-term loans such as student loans and home mortgages.
Four phases, in order. Don't skip ahead — each one sets up the next.
- L01 · What a loan is, and what amortization means.
- L02 · The amortization formula, anatomized.
- L03 · Auto loans: the standard amortizing loan.
- L04 · Credit cards: the minimum-payment trap.
- L05 · Student loans: subsidized, unsubsidized, repayment plans.
- L06 · Mortgages: 30 years, dollar by dollar.
- DQ 1 · Build a six-category budget, SUM formulas + percent of total, Cross-tab references + percent change
- DQ 2 · Build the loan calculator by hand, Compute total paid + interest, MA2 muscle memory
- Component 1 · Income and Projection
- Component 2 · Student Loans
- Component 3 · Credit Cards
- Component 4 · Annual Budget
- Q1 · Finding the monthly payment, total payment, and interest for a loan
- Q2 · Computing the unpaid balance for a credit card statement
- Q3 · Finding the down payment, loan amount, and monthly payment for a loan
- Q4 · Comparing monthly payments for subsidized and unsubsidized student loans
- Q5 · Finding the interest paid, principal reduction, and new balance after a mortgage payment
- Q6 · Comparing monthly payments and total costs of two loans
Plan for the whole week. These are typical times, not maximums — go faster if it clicks, slower if you're getting stuck.
You won't get through every lesson on the first try. Here's where to look:
Ready to start?
▸ Start Lesson 01