LOANS21.DOC **

The spreadsheets in this archive (distributed as LOANS21.ARC) solve the
financial calculation problems created by loans (mortgages, etc.) which
involve "odd days" in the payment calculations. Have you ever wondered
why none of the answers on your PC match your exact mortgage payment?
Perhaps your loan was issued based upon the circumstances of the closing,
but payments were prescheduled for the 15th of each month. Then the
first period would include "odd days" and you may have been unable to
confirm the mortgage math using conventional financial calculators.

Simply start at the top of the spreadsheet, fill in the unprotected
cells, and PgDn for summary information. The correct payments are
calculated where the "odd days" are figured by both compound and
simple interest (older mortgages probably used the simple interest
odd days method).

Frequently, a loan is issued on a certain day and the first payment date
is not exactly one loan period. Therefore, an "odd days" calculation is
required to arrive at the correct payment amount. The HP-12C financial
calculator handles this well; PC financial calculation programs rarely
do.

The enclosed spreadsheets are for use with Lotus 1-2-3 (2.01), Quattro (1.0),
FrameWork III (1.0), or Lucid 3-D (1.22). Be forewarned, however, that
LUCID 3-D still contains bugs in the INT() function and may indicate an
error condition were none exists (for example, INT(31.1) yields "ERR" in-
stead of "31").

By the way, actual bank interest is recalculated based upon the actual
payment dates and the actual length of each period (which may, for example,
vary due to the length of the month) and may account for an irregular final
payment. Nevertheless, in calculating the planned payments for a fixed
payment term loan agreement, the figures presented by these spreadsheets
should accurately reflect the figures generated by any reputable bank.

Todd Natkin, Attorney
(202) 331-0094 Voice
(202) 887-5068 FAX

EOF - LOANS21.DOC