The loan and mortgage calculators use the standard amortisation formula, and the schedule they print explains something that surprises most first-time borrowers: with a level monthly payment, the split between interest and principal shifts dramatically over the term. Interest is charged on the outstanding balance, so at the start — when the balance is at its highest — most of the payment is interest and very little reduces what you owe. On a typical 30-year mortgage the halfway point in time arrives long before the halfway point in principal repaid. This is also why an overpayment made in year three saves several times more interest than the same amount paid in year twenty.
Interest rates need care because two different numbers are both called "the rate". The nominal annual rate ignores compounding; the effective annual rate accounts for it. At 12% nominal, monthly compounding produces 12.68% effective, and the gap widens as the rate rises. The compound interest calculator lets you set the compounding frequency explicitly for exactly this reason. When comparing borrowing offers, the figure to compare is the APR, which is required to fold in mandatory fees — a lower headline rate with a large arrangement fee routinely loses to a higher rate without one.
Currency conversion here uses the European Central Bank's reference rates, which are published once per working day at around 16:00 CET. Two consequences follow. They are not live rates, so a figure computed on Saturday reflects Friday's publication. And they are reference rates, not transaction rates — a card network or bank adds a spread on top, commonly 0.5% to 3%, so the amount that reaches your statement will differ from the arithmetic here. Use these numbers for estimating and comparison, never for reconciling an account.
One piece of arithmetic that causes genuine confusion in reporting: percentage points and percent change are different things. A rate moving from 4% to 6% has risen by two percentage points, and by 50%. Both statements are correct and they describe the same event. The percentage calculator handles each case separately so you can be explicit about which one you mean.
Nominal rate versus what you actually pay
The effect of compounding frequency on a 12% nominal annual rate:
| Compounding | Periods per year | Effective annual rate |
|---|---|---|
| Annually | 1 | 12.00% |
| Quarterly | 4 | 12.55% |
| Monthly | 12 | 12.68% |
| Daily | 365 | 12.747% |
| Continuously | ∞ | 12.750% |