EXCERPTS FROM

MONTHLY PAYMENT

CHART

Showing monthly payments needed to pay off loans, computed on the basis of interest at the rate of 1% per month on declining balances of the loan.

Computed by Financial Publishing Company, Boston

Printed in U.S.A.

73079 061-77

Chart No. 4A-1504

EXPLANATION

Traditionally the return on money invested is stated as an annual interest rate on the funds actually in use. For monthly payment loans the interest rate per month is 1/12 of the annual interest rate. In these tables we shall call this annual interest rate the actuarial rate. It is exactly the same rate you talk about for a G. I. mortgage, or an FHA mortgage or any other direct reduction loan. The actuarial rate expresses the true return on an investment; any other is at best an approximation.

Thirty states and the District of Columbia now have statutes specifying the maximum finance charge on auto or other installment finance, most of them expressing this maximum rate as an "add-on"; that is, the charge per $100 of original balance per year applied for the full term. The actuarial interest rate on funds actually in use is something less than double the stated rate of charge.

The next 4 pages translate "add-on" rates into actuarial rates, and vice versa.

Bank installment loans are often made on a "discount per year" basis; that is, the charge is deducted from the note instead of added on to the amount borrowed. Pages 8 to 11 are tables translating "discount per year" into actuarial rates, and vice versa.

The FHA Title I home improvement loans prescribe a different method of charge, the "Constant Ratio". Pages 12-15 are tables translating this to actuarial rates, and vice versa.

Pages 2 and 20 summarize the rates named as maximum by statute in each state.

Pages

4-5

INDEX TO TRANSLATER TABLES

Add-on to actuarial.

6-7 Actuarial to add-on.

8-9 Discount per year to actuarial.

10-11 Actuarial to discount per year.

12-13 One year discount, constant ratio, to actuarial. 14-15 Actuarial to one year discount, constant ratio.

ACTUARIAL EQUIVALENTS of ADD-ON RATES The annual add-on rate is shown as the left hand index. If this rate is applied to the original amount for the full term and the loan is repaid monthly, then the body of the table shows the actuarial rate of return on the money actually outstanding.

7.00 10.47 11.90 12.43 12.68 12.81 12.87 12.91 12.88 12.83
7.25 10.84 12.32 12.87 13.12 13.25 13.32 13.35 13.32 13.26
7.50 11.22 12.74 13.30 13.57 13.70 13.77 13.80 13.76 13.69
7.75 11.59 13.17 13.74 14.01 14.14 14.21 14.24 14.19 14.12
8.00 11.96 13.59 14.18 14.45 14.59 14.65 14.68 14.63 14.55
8.25 12.33 14.01 14.61 14.89 15.03 15.10 15.12 15.06 14.97
8.50 12.71 14.43 15.05 15.34 15.48 15.54 15.55 15.49 15.40
8.75 13.08 14.85 15.49 15.78 15.92 15.98 15.99 15.92 15.82
9.00 13.45 15.27 15.92 16.22 16.36 16.42 16.43 16.35 16.24
9.25 13.82 15.69 16.35 16.66 16.80 16.86 16.86 16.78
9.50 14.19 16.11 16.79 17.10 17.24 17.30 17.29 17.21
9.75 14.57 16.53 17.22 17.53 17.68 17.74 17.73 17.63
18.12 18.17 18.16 18.06 17.92
18.56 18.61 18.59 18.48

10.00 14.94 16.94 17.66 17.97
10.25 15.31 17.36 18.09 18.41
10.50 15.68 17.78 18.52 18.85 18.99 19.05 19.02 18.90
10.75 16.05 18.20 18.95 19.28 19.43 19.48 19.44 19.32

16.66

17.08

17.50

18.33

18.75

19.16

11.00 16.43 18.62 19.39 19.72 19.86 19.91 19.87 19.74 19.57 11.25 16.80 19.04 19.82 20.15 20.30 20.35 20.30 20.16 19.98 11.50 17.17 19.45 20.25 20.59 20.73 20.78 20.72 20.57 20.39 11.75 17.54 19.87 20.68 21.02 21.17 21.21 21.15 20.99 20.79

12.00 17.91 20.26 21.11 21.46 21.60 21.64 21.57 21.41 21.20 12.25 18.28 20.63 21.54 21.89 22.03 22.07 21.99 21.82 21.60 12.50 18.65 21.00 21.97 22.32 22.47 22.50 22.42 22.23 22.01 12.75 19.03 21.37 22.40 22.76 22.90 22.93 22.84 22.64

22.41

23.61

13.00 19.40 21.74 22.83 23.19 23.33 23.36 23.26 23.05 22.81 13.50 20.14 22.48 23.68 24.05 24.19 24.21 24.09 23.87 14.00 20.88 23.22 24.54 24.91 25.04 25.06 24.92 24.68 14.50 21.62 23.97 25.39 25.77 25.90 25.91 25.75 25.49

24.40 25.19

15.00 22.36 24.71 26.24 26.62 26.75 26.75 26.58 26.30 25.98 15.50 23.10 25.45 27.09 27.48 27.60 27.60 27.40 27.10 26.76 16.00 23.84 26.19 27.94 28.33 28.45 28.43 28.22 27.89 27.53 16.50 24.58 26.93 28.79 29.18 29.29 29.27 29.03 28.69 28.30

17.00 25.32 27.67 29.64 30.03 30.14 30.10 29.85 29.48 29.07 18.00 26,80 29.15 31.32 31.72 31.81 31.76 31.46 31.04 30.59 19.00 28.28 30.62 32.97 33.40 33.48 33.41 33.06 32.60 32.10 20.00 29.76 32.10 34.44 35.07 35.14 35.05 34.65 34.14 33.60

ACTUARIAL EQUIVALENTS of ADD-ON RATES

The annual add-on rate is shown as the left hand index. If this rate is applied to the original amount for the full term and the loan is repaid monthly, then the body of the table shows the actuarial rate of return on the money actually outstanding.

14.13
14.53
14.92

6.00 11.03 10.97 10.91 10.85 10.72 10.58 10.46 10.33 10.21 6.25 11.47 11.40 11.34 11.27 11.12 10.98 10.85 10.71 10.59 6.50 11.90 11.83 11.76 11.68 11.53 11.38 11.23 11.09 10.96 6.75 12.33 12.25 12.17 12.09 11.93 11.77 11.61 11.47 11.32 7.00 12.76 12.68 12.59 12.50 12.33 12.16 11.99 11.84 11.69 7.25 13.18 13.10 13.00 12.91 12.73 12.55 12.37 12.21 12.05 7.50 13.61 13.51 13.42 13.32 13.12 12.93 12.75 12.57 12.41 7.75 14.03 13.93 13.83 13.72 13.52 13.31 13.12 12.94 12.76 8.00 14.45 14.35 14.24 13.91 13.69 13.49 13.30 13.12 8.25 14.87 14.76 14.64 14.29 14.07 13.86 13.66 13.47 8.50 15.29 15.17 15.05 14.68 14.45 14.23 14.02 13.82 8.75 15.70 15.58 15.45 15.32 15.07 14.82 14.59 14.37 14.16

9.00

9.25

9.50

9.75

16.12 15.99 15.85 15.71 15.45 15.19 14.95 14.72 14.51 16.53 16.39 16.25 16.11 15.83 15.56 15.31 15.07 14.85 16.94 16.80 16.65 16.50 16.21 15.93 15.67 15.42 15.19 17.35 17.20 17.04 16.89 16.58 16.29 16.02 15.77 15.53

10.00 17.76 17.60 17.44 17.27 16.96 16.66 16.38 16.11 15.86 10.25 18.17 18.00 17.83 17.66 17.33 17.02 16.73 16.45 16.20 10.50 18.58 18.40 18.22 18.04 17.70 17.38 17.08 16.79 16.53 10.75 18.98 18.79 18.61 18.42 18.07 17.74 17.42 17.13 16.86

11.00 19.38 19.19 19.00 18.80 18.44 18.09 17.77 17.47 17.19 11.25 19.78 19.58 19.38 19.18 18.80 18.45 18.11 17.80 17.52 11.50 20.18 19.97 19.77 19.56 19.17 18.80 18.46 18.14 17.84 11.75 20.58 20.36 20.15 19.94 19.53 19.15 18.80 18.47 18.17

12.00 20.98 20.75 20.53 20.31 19.89 19.50 19.13 18.80 18.49 12.25 21.37 21.14 20.91 20.68 20.25 19.85 19.47 19.13 18.81 12.50 21.77 21.53 21.29 21.05 20.61 20.19 19.81 19.45 19.13 12.75 22.16 21.91 21.66 21.42 20.96 20.54 20.14 19.78 19.44 13.00 22.55 22.30 22.04 21.79 21.32 20.88 20.47 20.10 19.76 13.50 23.33 23.06 22.79 22.52 22.02 21.56 21.14 20.75 20.39 14.00 24.11 23.82 23.53 23.25 22.72 22.24 21.79 21.38 21.01 14.50 24.88 24.57 24.26 23.97 23.41 22.91 22.44 22.02 21.63

15.00 25.64 25.32 24.99 24.68 15.50 26.41 26.06 25.72 25.39 16.00 27.16 26.80 26.44 26.10 16.50 27.91 27.53 27.16 26.80

24.10 23.57 23.09 22.64 22.24 24.79 24.23 23.73 23.27 22.85 25.46 24.88 24.36 23.88 23.45 26.14 25.54 24.99 24.50 24.05

17.00 28.66 28.26 27.87 27.50 26.81 26.18 25.62 25.11 24.65 18.00 30.14 29.70 29.28 28.88 28.13 27.46 26.86 26.31 25.82 19.00 31.61 31.13 30.67 30.24 29.44 28.72 28.08 27.51 26.99 20.00 33.06 32.54 32.05 31.58 30.73 29.97 29.29 28.68 28.14