Entering formulas in scheduled transactions

[Derek Atkins]

Matthew Vanecek <mevanecek at yahoo.com> writes:

> > What?  You cannot pre-pay your mortgage?  That sucks!
> > 
> 
> I can prepay (i.e., early payoff), but the loan is amortized, not simple
> interest.  In any case, druids weren't especially noted for their
> mathematical skills. Now, if we used Mayans instead.... =P

Meaning that if you prepay an extra $1000/mo in principal it doesn't
change the amount of interest you pay per period?  Perhaps I'm not
sure what you mean by "amortized" (or perhaps my understanding
of the term is different than what you mean?)

According to webster:

am.or.tize \'am-*r-.ti-z also *-'mo.r-.ti-z\ vt [ME amortisen to deaden, 
   alienate in mortmain, modif. of MF amortiss-)X, stem of amortir, fr. 
   (assumed) VL admortire to deaden, fr. L ad- + mort-, mors death - more at 
   MURDER : to provide for the gradual extinguishment of (as a mortgage) usu. 
   by contribution to a sinking fund at the time of each periodic interest 
   payment

So, by this definition your principal/interest split is not
necessarily set in stone ahead of time.  The "amortization schedule"
you get is what you would pay assuming you do not pay-down your
mortgage.  The druid is showing what that P/I split would be (which
should match your amortization schedule), but it should also allow you
to pay down your mortgage (which would shift the P/I split towards a
larger P and smaller I).

-derek
-- 
       Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory
       Member, MIT Student Information Processing Board  (SIPB)
       URL: http://web.mit.edu/warlord/    PP-ASEL-IA     N1NWH
       warlord at MIT.EDU                        PGP key available