Interest Rate Table Creator
Compare loan and investment scenarios with different interest rates
Financial Note: These calculations are for educational purposes only. Consult a financial advisor for personal finance decisions.
Interest Rate Range
Summary Table
| Rate | Monthly Payment | Total Interest | Total Cost |
|---|
Detailed Amortization for Selected Rate
| Period | Payment | Principal | Interest | Balance |
|---|
Understanding Interest Rates
Loan Interest Basics
- Higher rates mean higher monthly payments
- Longer terms reduce monthly payments but increase total interest
- Early payments apply more to interest than principal
- A 1% rate difference can significantly impact total cost
Investment Growth
- Compound interest grows exponentially over time
- Small rate differences create large gaps over decades
- Starting early is more impactful than higher rates
- Annual compounding is standard for most investments
How Interest Rates Affect Payments
| Rate Difference | $100,000 Loan (30 years) | Monthly Payment | Total Interest |
|---|---|---|---|
| 3% vs 4% | $100,000 at 3% | $421.60 | $51,777.45 |
| $100,000 at 4% | $477.42 | $71,869.51 | |
| Difference | +$55.82/month | +$20,092.06 total |
Key Insight: A 1% rate increase on a $100,000 loan costs over $20,000 extra in interest over 30 years.
Frequently Asked Questions
What's the difference between APR and interest rate?
The interest rate is the base cost of borrowing, while APR (Annual Percentage Rate) includes the interest rate plus other loan fees. APR gives a more complete picture of loan costs.
How often is interest compounded on loans?
Most consumer loans compound interest daily but apply it monthly. Mortgages typically use monthly compounding. Credit cards usually compound daily.
Why does my early loan payment go mostly to interest?
This is how amortization works. Early in the loan, your balance is highest so interest charges are largest. As the principal decreases, more of each payment goes toward principal.
How can I reduce total interest paid?
1) Make extra principal payments 2) Choose a shorter loan term 3) Refinance at a lower rate when possible 4) Make biweekly instead of monthly payments.
Is it better to get a loan with lower payments or shorter term?
Shorter terms save you money on interest but have higher monthly payments. Choose the shortest term you can comfortably afford to minimize total interest costs.