Description on calculating compound interest quickly without using a program.
Annual interest rate is 3.5%. Go ahead and think of it as 0.035 right away.
Compounded monthly, so we need to know the monthly rate. Calculate = .002917
If you are adding .002917 of an amount to something, it's the same as multiplying by 1.002917 (if i add 10% to your grade it's the same as multiplying by 1.10)
So, you can think that you are multiplying your original loan by 1.002917 twenty-four times.
Rather than typing
we just type 2000 x 1.002917^24
Divide that by 24 months to get monthly payment amount.