What Current Yield Really Measures (and the 10-Second Calculation) To calculate current yield, divide the annual income an asset pays by its current market price and multiply by 100. For a bond, the formula is (annual coupon payment ÷ market…
Why Comparing Muni Yields Isn’t Just About the Tax-Equivalent Formula To compare municipal bond yields correctly, start with the tax-equivalent yield (TEY) but immediately layer on state tax, the alternative minimum tax (AMT), the 3.8% net investment income tax (NII),…
When you refinance an auto loan, your savings equal the difference between your old loan’s remaining total cost and your new loan’s total cost, including any refinance fees. To calculate it by hand, compute the monthly payment on both loans…
The Fast Answer: How to Calculate a Commercial Mortgage Payment If you want to know how to calculate commercial mortgage payment without relying on a black-box tool, use the standard amortizing loan formula but plug in commercial-specific inputs: loan principal…
How FHA Loan Works: The Straight Answer Before the Fine Print If you’re asking how FHA loan works, here’s the blunt version: the Federal Housing Administration doesn’t lend you a dime. It insures a private lender’s risk, which lets that…
How an Interest-Only Loan Works: The Core Mechanism If you’ve ever asked “how interest only loan works,” the shortest honest answer is this: for a preset period—usually 5 to 10 years—you pay the lender only the interest accruing on the…
What Estimating Loan Consolidation Savings Really Means (and My Costly First Mistake) To estimate loan consolidation savings accurately, you must compare the total interest and fees you will pay on your current loans over their remaining terms with the total…
The Real Answer: How to Compare Loan Options If you want to know how to compare loan options without getting burned, stop treating APR as the only scoreboard. In my 12 years advising borrowers and structuring debt, the only method…
What Credit Card Interest Actually Costs You (The Straight Answer) If you want to know how to calculate credit card interest, the engine is the daily periodic rate: your APR divided by 365, multiplied by your average daily balance, then…
What Is the Cost of Debt in Simple Terms? If a friend asked me to explain cost of debt in simple terms, I’d say it’s the effective price a company pays to borrow money, measured as a percentage after the…