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Not only loans and mortgages
On this page you will find some of the more unusual things you can do with Mortgage Wizard Plus. With unusual we mean things the program can do in addition to just standard loans and mortgages. But before getting into this, it is important to completely understand what the numbers in the various cells of the amortization schedule spreadsheet mean and what factors determine these numbers.
Therefore, first a few words about the amortization schedule using for exact day interest factors.
Daily Interest means that interest is accumulating every day. The amortization schedule shows accumulated interest only on days a payment is made. You can show the accumulated interest and the remaining balance for a non payment day by simply making a $0.00 lump sum payment for that day. This will create an extra row in the amortization schedule for that non payment day. The figure below is a section of an amortization schedule.
The first column shows payment dates. The date format is depending on Windows Control Panel settings. (Month/Day/Year for US computer setup). The number of days shown in each cell of column 2 are the number of interest days after the previous payment date. E.g. Row 17 shows that there are 31 interest days between June 1 and May 1, 2006. The interest rate shown in a row is the interest rate used for calculating the interest shown in the fifth column. The fourth row shows the payment you make and does not require further explanation. Each cell in the fifth row shows the accumulated interest since the previous payment. It is important to understand that the number shown in an interest cell depends on the remaining balance in the previous row, the number of days since the previous payment and the applicable daily interest factor. It is also important to understand that the interest shown in a certain row is not depending on the payment in the payment cell of that row. Any change in payment will only change the remaining balance by the same amount. In other words, the new remaining balance equals previous balance plus accumulated interest since previous balance minus the new payment. If the interest rate changes on a day in between regular payment dates, the program will insert a new row for the last date the old interest rate is still effective, with a payment of 0.00. The new interest rate will be used for all subsequent days until there is another interest rate change. In the sample above, rows 21 and 22 indicate an interest rate of 5 % for 19 days and an interest rate of 4.75% is used for a period of 11 days on Oct.1, 2006.
Calculate the future value of an investment
The Daily Interest Calculator bonus program that comes with Mortgage Wizard Plus is great to calculate the future value of an investment. But, if there are additional deposits and/or withdrawals or if the interest rate changes you need something else. MW-Plus was not designed to do these type of things, but that does not mean that it can't be done with MW-plus. Let's assume that you have $ 10,000.00 invested at an annual interest rate of 5% compounded monthly on May 10, 2005 and you want to know the future value at a selectable date with possible deposits, withdrawals and changes in interest.
Here is how it can be done:
- Open Mortgage Wizard Plus
- On the Mortgage Calculator Window make the following Menu selections:
- Freq.Of Pmt Menu - Annual.
- Calc. Mode Menu - Remaining Balance
- Country Menu - Other compounding/Monthly compounding.
- Enter the following in text boxes
- Mortgage Amount - 10000
- Percent Interest - 5
- Annual Payment - 0
- Amortization Period - 10 (enter the max. period or more)
- Click on the Calculate button. A "Please Note" box pops up. Ignore the message and click on 'OK'
- Click on the Amort. Sched button. A "Setup for Amort. Sched" box pops up.
- Select one of the two Exact Day methods.
- Enter the Start Date - 05/10/2005
- Enter the First Pmt Date - 05/31/2005
- Select Until end of mortgage
- Click on the OK button to display the "Amort. Sched."
The amortization schedule shows the Future Value in the Remaining Balance column for the last day of each year. If you like to know the balance on another day, make a $0.00 lumpsum payment for that other day. Just double click on a Payment cell to initiate a lumpsum payment entry. You can add other deposits as lumpsum payments and withdrawals as negative lumpsum payments. If there are interest changes, you can initiate the change by simply double clicking an Pct_Int cell. If desired, use Footnotes for your comments. The difference between a Bank Statement and Mortgage Wizard Plus table is that Bank statements normally report interest on the last day of each month, whereas Mortgage Wizard Plus shows accumulated interest and cumulative interest on every row. The final balance should of course be the same.
Manual entry of mortgage payments
If you have to deal with irregular and flexible payments, it may be desireable to enter payments the day they are made.
Here is one method on how this can be done:
- Create a regular amortization schedule using an Exact day factors method.
- Double Click the Payment cell for row 1. A dialog box will pop up.
- Verify that the "Change series of payments" option button is selected.
- Verify that the Payment Number entry is 1.
- Enter a New Payment of 0.
- Click on the "Update Amort. Sched." button.
Every time a payment is made, you simply select the applicable cell, type in the payment and press the "Enter" key on your keyboard. Dates can be changed by simply typing in the new date. Zero payment rows can be deleted individually or by selecting a group. A payment can also be added like a lump sum payment. All kinds of editing is possible by just double clicking a cell in the amortization schedule. You can use the Row locking features of Mortgage Wizard Plus (see Help), if you are afraid that a previously edited row gets accidentally changed.
More unusual things
Trying the more or less unusual things yourself will make you fast familiar with what Mortgage Wizard can do for you. If there is something you like to do, but cannot figure it out, please send an e-mail to Product Support. It is also very much appreciated if you can add something here for the benefit of others.