I'm bad at math..

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Elite Baiter Joined: 19 Jan 2009 Posts: 1440

If I take the limit on the loan, can anyone figure out how long should it take me to pay it back?

Quote:

For Loans Contact Sir Edmond Rawlings ,Private Loan services Inc., For Business Loans, Private loans,Holiday Loans and General Loans, Agricultural Loans,Mortgage Facility Our Seasonal offer is limited so hurry now. For Loans of $10,000.00 Min. To $100,000,000.00 Max. at 1.5 % interest Fixed.

Name of Applicant:
Home Tel:
Mobile:
Sex:
Loan amount applied for :
Loan Repayment duration(Years/Months/ Centuries?):
Contact Person:Sir Edmond Rawlings & Dr Mrs. Florence ("Sir" and "Dr.Mrs"? Very impressive!)WordsworthTel:+60-166-459-631 (Malaysia Office)

Posted: Thu Dec 17, 2009 1:48 am

There are a number of loan amortization calculators available on the web but they tend to top off at $1,000,000.

In this case, the length of loan would depend on the periodic payment. The length of the loan, along with the annual rate and the principal, is usually agreed upon when the loan is made. Those are used to calculate the periodic (usually monthly) payment. With the information the lad gave you, you would need to state a monthly payment to calculate the length of the loan.

I would suggest going back to the scammer and asking him to calculate it for you, tell him you are willing to pay $xxx per month. One of the cardinal principles I learned in scambaiting is to always make the lad do the work.

Posted: Thu Dec 17, 2009 2:24 am

Ask the lad to do the math.

Then question it.

Wink

Edit: Oops, I just noticed that was the gist of Lakeside's comment!

Posted: Thu Dec 17, 2009 3:57 am

@Scammedout: Unless I missed a detail, the actual technical answer to your question is "it depends".

[lecture]
To determine the pay-back period, you need (1) the amount borrowed (you said you want to borrow the max, so we have that), (2) the interest rate (the scammer is offering 1.5%), (3) the compounding method or frequency (which I will assume will be compounded monthly) and also (4) the size of the monthly payments -- but that is not stated.

It is more typical to state the payback period (e.g., 10 years = 120 months) and then the monthly payments can be determined, given the interest rate, method/frequency of compounding and the amount being borrowed.

The formula for finding the monthly payments, A, for N months can be found with the the following formula

A= P * [ i * (1+i)^N ] / [ ((1+i)^N ) - 1 ]

where, in our case, i is the interest rate per month or period (in our example, i = 0.015/12 =0.00125 since there are 12 compounding periods per year with monthly compounding), N is the total number of compounding periods over the life of the loan and P is the amount being borrowed.

So, here with P=$100M, i=0.015/12 = 0.00125 and N=120 (for 10 years), the monthly payments would only be

A = ($100M) * [ 0.00125*(1.00125)^120] / [( (1.00125)^120) -1] = $897,915.

If the compounding is daily, the same formula can be used except, in such a case, i=0.015/365 and the total number of compounding periods would be N=365*10 (assuming 10 years again). Yes, I am ignoring leap years. Wink

Oh, yeah, for completeness: 6^3 means 6 raised to the power of 3.
[/lecture]
Let's hope I don't have too many typos!

Posted: Thu Dec 17, 2009 4:13 am

I use this one in real life:

http://www.bankrate.com/calculators/mortgages/mortgage-calculator.aspx

Posted: Thu Dec 17, 2009 4:27 am

I verified the site Nap Olean gave.

It doesn't like the 100,000,000 mortgage amount, so use 100,000 instead with 10 years (120 months) and 1.5% as the interest rate to get a monthly payment of $897.91 which, of course, you then have to multiply by 1000 since we couldn't use the full $100M (for some reason Rolling Eyes

). So, its result matches with mine. Smile

Elite Baiter Joined: 19 Jan 2009 Posts: 1440

Wow, you guys are good. Let's see if Sir Edmond comes up with the same monthly figure! Smile