There are many types of interest calculation, I think daily rest, monthly compounded is the best...

i don't understand why we need weekly payment...

Maybe i do a calculation and see how, (pls correct me if wrong)

Example of Loan 300k for 30 years, interest 3.45%. Monthly installment RM1339.
Let say interest start frm 01/01/09, installment commences on 01/02/09.
Balance 300,000.00
Interest for Jan: 01/01/09 to 31/01/09 =28.36 x 31 = 879.16

Interest for Feb:
Interest for 01/02/09 =28.44.
O/S = 299,540.16 after installment paid on 01/02/09 (principal deducted = 1339-879.16)
Interest from 02/02/09 to 28/02/09 = 28.31 x 27 = 764.37
total interest = 28.44 + 764.37 = 792.81

Interest for march:
Interest for 01/03/09 = 28.39
O/S = 298,993.97 after installment paid on 01/02/09 (principal deducted = 1339-792.81)
Interest from 02/03/09 to 31/03/09 = 28.26 x 30 = 847.80
total interest = 28.39 + 847.80 = 876.19


Let say weekly payment, amount would be 1339/4 = 334.75 (say pay on 1st, 7th, 14th & 21st)
Interest for Jan = same

Interest for Feb:
Interest for 01/02/09 =28.44
O/S now = 300,544.41
Interest from 02/02/09 to 07/02/09 = 28.41 x 6 = 170.46
O/S now = 300,209.66
Interest from 08/02/09 to 14/02/09 = 28.41 x 7 = 198.87
O/S now = 299,874.91
Interest from 15/02/09 to 21/02/09 = 28.41 x 7 = 198.87
O/S now = 299,540.16
Interest from 22/02/09 to 28/02/09 = 28.41 x 7 = 198.87
total interest = 28.44 + 170.46 + 198.87 + 198.87 + 198.87 = 795.51

O/S = 301,339.92
interest for march;
Interest for 01/03/09 =28.48
O/S now = 301,005.17
Interest from 02/03/09 to 07/03/09 = 28.45 x 6 = 170.70
O/S now = 300,209.66
Interest from 08/03/09 to 14/03/09 = 28.45 x 7 = 199.15
O/S now= 299,874.91
Interest from 15/03/09 to 21/03/09 = 28.45 x 7 = 199.15
O/S now= 299,540.16
Interest from 22/03/09 to 31/03/09 = 28.45 x 10 = 284.50
total interest = 28.48 + 170.70 + 199.15+ 199.15 + 284.50 = 881.98



so pay monthly installment RM1339 is different from 4 x 334.75,,,,
which one better? i think you can compare...

i think same thing also when you want to pay lump sum payment
example RM10000 one time is better than RM1000 x 10 times on different days.
correct arr??


also
there are banks that calculate interest based on Daily rest monthly compounded ...
if it's daily rest, it's actually a simple maths,

Unfortunately some banks are "daily rest" but they must be having very "special" formula and they cannot tell you...

if not mistaken, EPF give a cheque...