Methodology

This page explains how our calculators work. Transparency builds trust.

Credit Card Payoff

Formula: Each month:

Interest = Balance × (APR ÷ 12 ÷ 100)
Principal = Payment − Interest
New Balance = Balance − Principal

Assumptions:

Fixed monthly payment
No new charges
APR does not change
Payments applied to interest first, then principal (standard)

Limitation: Minimum payments often decrease as balance drops. We assume constant payment.

Debt Snowball / Avalanche

Snowball: Order debts by balance (smallest first). Extra payment goes to smallest. Avalanche: Order debts by APR (highest first). Extra payment goes to highest APR.

Assumptions:

Minimum payments remain constant
No new debt
Budget covers all minimums

Salary Conversion

Formula: Hourly = Annual ÷ 2,080 | Annual = Hourly × 2,080

Assumptions:

2,080 hours/year = 52 weeks × 40 hours (US full-time standard)
Gross amounts only (no tax/benefits)

Loan Payment & Amortization

Formula: M = P × [r(1+r)^n] / [(1+r)^n − 1]

Where: P = principal, r = monthly rate, n = months.

Extra payments: Applied directly to principal. Recalculates remaining schedule.

Assumptions:

Fixed rate
No fees or escrow
Standard US amortization (interest first)

Rounding

We round displayed values for readability. Internal calculations use full precision. Export CSV may show more decimals.

Updates

We may refine formulas. Significant changes will be noted here.