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Not as bad as we thought: Obamacare Premiums in California Lower than Expected

Not as bad as we thought: Obamacare Premiums in California Lower than Expected

 

 
 Health insurance providers in the state of California will charge an average of $304 a month for the silver-level coverage (the least expensive plan) in state-based exchanges starting next year. That said, many residents will pay far less than this figure for coverage. 
 
Rates for Obamacare plans will vary by region, level of coverage, and age; the majority of low-income California residents will qualify for federal subsidies that will further lower premiums. The plans will be provided in four tiers, ranging from bronze to platinum. The bronze plan will charge lower premiums, but will carry increased out-of-pocket benefits, and the platinum plan will have the highest premiums but the cheapest out-of-pocket costs. 
 
Federal subsidies will be based on the cost of silver plans and will be provided to those earning up to 400 percent of the poverty line, which comes out to approximately $45,000 for an individual and $92,000 for a family of four. 
 
State-based exchanges will open for enrollment in October of this year, while coverage under Obamacare will start in January. 
 
Multiple plans from insurance providers including Blue Cross Blue Shield will be available based on region. However, other large providers, including UnitedHealth declined to participate in the program. 
 
The least costly silver plan for a young person will cost around $215 a month, but those regarded as low income (earning 150 percent of the poverty line) may only be required to pay $44 after procuring federal subsidies. The same plan for middle-aged individuals will cost roughly $275 a month and approximately $40 after the subsidies kick in. 
 
States are beginning to unveil details of their plans; however, California has provided the most detail in describing its plans. 
 
“Several Americans will see rates similar to what they are paying now, and in many cases, far lower and with better benefits,” said the Washington Insurance Department in a blog posting. “We are definitely not seeing the significant rate increases that some insurance providers had predicted.”
 
 
Source: whitehouse.gov

Hess to Quit Retail Gasoline Business

Hess to Quit Retail Gasoline Business

 

The Hess Corporation is set to discontinue its retail gasoline operations along with its marketing and energy trading businesses to focus on production and exploration, the company announced on Monday. 
 
Hess also announced it will boost its yearly dividend to $1 per share and buy back up to $4 billion in company stock. Upon release of this news, Hess stock increased $2.45 a share or $3.68 percent to $68.99 on Monday. 
 
Hess also said it will nominate five independent directors for election to its board at the annual shareholders meeting in May. Moreover, the company named a six director that will be up for election at the 2014 shareholder’s meeting. Six of the oil giant’s current directors will announce their retirement from the board in the upcoming months.
These announcements come just over a month after prominent Hess investor Elliot Management pushed for alterations at the company and began lobbying for new management. The plea from Elliot with regards to changing leadership was based on an accusation that the board partook in poor oversight and engaged in a “decade of failures.”
 
Hess has already issued plans to sell domestic oil storage facilities and close a New Jersey refinery as it leaves the volatile refining sector. ConocoPhillips, Murphy Oil and Marathon Oil have all syphoned and split their refining businesses in recent years to place a greater emphasis on production and exploration. 
 
 
Source: CNN

Is the Cure for HIV at Risk because of Budget Cuts?

Is the Cure for HIV at Risk because of Budget Cuts?

 

Dr. Deborah Persuad of Johns Hopkins Children’s Center spearheaded a remarkable treatment plan that cured the HIV virus in a toddler. However, the budget cuts undertaken by the United States Federal Government will reduce funding delivered to the National Institutes of Health, which co-founded the incredible achievement. 
The cuts in federal spending, known as sequestration, could slash critical medical research, including the recently unveiled treatment plan that cured the toddler.
 
The National Institutes of Health, which co-administered the study, is set to lose over $1.6 billion of its $31 billion budget through September of this year as a result of the sequester. As the most prominent supporter of biomedical research in the United States, it could reduce funding for hundreds of research programs, such as the HIV case. 
 
The National Institutes of Health, in conjunction with AIDS research foundation, funded the treatment plan used to treat the child. 
 
Chris Collins, the vice president of public policy for the AIDS Research Foundation said there was a “brutal irony” to the timing of the HIV cure discovery and the budget cuts. “As we have heard this exciting news about HIV cure research, the entire AIDS research field is undergoing a significant setback,” said Collins. “If we are in the business of ending this virus, this would be the time invest, not to cut back.”
 
Doctors at Johns Hopkins Children’s Center used a mix of antiretroviral drugs to eliminate the HIV virus out of the Mississippi toddler, who was born to a woman with AIDS and is now free of the infection. 
 
The toddler was given a cocktail of drugs including Epivir, Viramune and Zidovudine. The child was then treated with a Kaletra drug mix to sweep-out the virus. This combination of drugs costs several hundred dollars when produced in a generic fashion in developing nations. 
 
The budget cuts would reduce funding to long-running research programs that the National Institutes of Health is already committed to, claims Dr. Anthony Fauci, the director of the National Institute of Allergies and Infectious Diseases. 
 
Dr. Fauci claims that the budget cuts will damage the program and its initiatives in the long run. Moreover, Fauci said the budget cats may also keep future research projects from materializing. 
 
 
Source: Whitehouse.gov

Waterproof Tablets and Phones set to make a Splash

Waterproof Tablets and Phones set to make a Splash

 

Consumer electronics and water seldom mix, and for many users, there are few things more annoying than a tablet or smartphone that’s been accidentally dropped in water.

A trip to the bathroom or a rainy day used to require babysitting our expensive devices. “I cannot tell you how many users I know who have accidentally dropped their device in the toilet or their kid spilled a drink all over it,” said senior writer Maggie Reardon.

A soaked tablet or phone has traditionally meant shelling out a few hundred for a replacement; however, new technology has moved rugged cell phones and waterproof cases to withstand pesky situations or adverse conditions. Several smartphones and tablets highlighted at this  year’s Consumer Electronics Show, and Mobile World Congress Convention suggests the future is bright for tablets and phone that are both powerful and waterproof—or at least water resistant.

Sony debuted the Xperia Tablet Z at last week’s Mobile World Congress; the item is drawing praise for its functionality, sleek design and ability to withstand getting drenched by water or other liquids.

“If you are taking a bath and want to enjoy a movie and you accidentally drop the tablet into the water, it will be okay,” said Zperia Z product manager Sharath Muddaiah.

Makers of the Xperia Z claim the tablet can withstand sprays of water and can submerges in up to 3 feet of water for up to 30 minutes.

The tablet does not boast special coating; however, the device’s parts are all water-persistent. The water-resistant features of the new tablet do not come with the bulky characteristics associated with the so-called rugged phones.

Although far more water-resistant than most smart devices, Sony cautions that the tablet’s port covers must be sealed up to hold water. The device’s micro-USB and headphone sockets are lined with rubber port covers that must be flipped up for access.

Sony is not the only electronics company making an effort to provide a sturdier smart device as Fina’s Huawei dunked its Ascend D2 phone in a tub of water for attendees at the Mobile World Congress Convention.

Other electronic companies trying to solve the liquid-incompatibility problem are reciting the same mantra: water-resistant features are incorporated on these devices to help in case of accidents, and not to make a device that is safe for scuba diving. In the meantime, there is always the traditional fix if your device has gone for an unplanned trip to a liquid sanctuary: grab a bowl and pick-up a bag of rice. 

 

 

Source: AP

Stock Market Soars to Record High

Stock Market Soars to Record High

 

The Dow Jones Industrial Average climbed to a record high during Tuesday’s trading hours. The Dow rallied more than 150 points higher at one point on Tuesday to an all-time high of 14,286.37. This number tops both the Dow’s intraday and closing records set during October of 2007. Additionally, the S&P 500 added 16 points and is currently trading at its highest level since October of 2007. The S&P 500 is currently 1.5% away from its record high, which was also set in October of 2007. 
 
“We are going back to the highest levels in American history, but we have more things going for the economy and the stock market that we did during our last boom,” said Art Hogan, managing director at Lazard Capital. 
 
During the splendor of 2007, the economy was on the verge of heading into a tailspin, said Hogan, whereas now the market is getting stronger, albeit at a slow pace. 
Stocks are cheaper across the board, as a number of blue chips trading at 17 times earnings estimates in 2007 are valued roughly at 14 times earnings estimates for 2013. 
 
That said not all indexes set record highs; the NASDAQ, which climbed over 40 points on Tuesday, is nearly 38% below its all-time highs that were set during the dot-com boom in March of 2000. 
 
Although Hogan expects stocks to keep rising, the investment professional expects to come across some significant bumps along the way. Hogan envisions many investors pulling out of the market after earning more than 9% year-to-date, causing stocks to move sideways or trend down slightly. 
 
Additionally, concerns over Europe and the ongoing budget drama in Washington could act as a catalyst for a brief slide. However, a pullback could be short-lived and actually a mechanism to propel long-term growth. “There is a ton of money on the sidelines waiting to get in the market, but those investors want they need a pullback before they can jump in,” said Hogan. 
 
To this end, individual investors have invested just $21 billion in U.S. mutual funds this year, a marginal amount given that they pulled in excess of $500 billion from the funds since the financial crisis. 
 
 
Source: White House Press Release

Cyber Currency is Booming

Cyber Currency is Booming

 

Bitcoin—digital currencies created by an anonymous hacker–sounds like something from the future or science fiction; however, the four-year-old currency is quite real and trading at an all-time high. 
 
One Bitcoin was worth approximately 40 U.S. dollars earlier this week, and surged today to nearly $50. That’s an increase from roughly $13 in January and 5 cents in 2010, according to Mt. Gox, the digital currency’s primary exchange. On Mt. Gox and other trading platforms, traders can purchase or sell their digital coins for real cash. 
Watchers of the alternative currency attribute Bitcoin’s success to the recent decision by several popular technology vendors and networking sites to accept the currency. Just recently, online community Reddit and blog hosting site WordPress decided to accept Bitcoins as an acceptable form of payment. 
 
In addition to their acceptance the counts are much easier to obtain; until recently, buyers typically needed to navigate international wire transfers and wait days for Bitcoin transactions to clear. Popular sites like Bitinstant and Coinabse now let customers purchase bitcoins with cash or bank transfers. 
 
That said, some longtime advocates of the digital currency are leery of the recent surge in value. “The majority of people do not think $40 is an acceptable price right now,” claimed Jon Holmquist, head of marketing at two related startups, Bitcoinstore and Coinabul. 
 
The price fluctuations are widely due to the relatively low number of transactions and overall value of coins in circulation—the value of Bitcoins went from below $1 to over $28, then back to under $7 in 2011 alone. 
 
The digital currency was created in 2009 by an anonymous hacker using the screen name “Satoshi Nakamoto”—the Japanese equivalent of a vanilla name like “Paul Smith.” Bitcoin has no central-bank backing the currency; the idea behind Bitcoin was to create a currency that is free from government intervention to conduct transactions without processing or exchange fees. 
 
The digital currency is “minted” by a network of computers using specialized software on powerful hardware systems. The technology is designed to release new coins at a steady pace. Currently, a new block of 25 Bitcoins is generated every 10 minutes, adding to the pool of roughly 11 million circulating coins. 
 
The system used to generate coins is extremely difficult to infiltrate, but the digital wallets used by Bitcoin owners to purchase goods in online stores aren’t so protected. A series of thefts in 2011 crashed the currency’s value and one operator lost over 24,000 Bitcoins to an online thief in September of last year. Skeptics also contend that the anonymous culture of the currency could make it an instrument for money launderers. 
 
However, Bitcoin supporters think the currency’s recent rise is a sign of its widespread acceptance and growing community. Those supporting the currency see it as a legitimate alternative to more traditional payment methods. 
 
 
Source: AP
 

Workers not getting their Piece of the Pie

Workers not getting their Piece of the Pie

 

The gap between hourly pay and productivity is the highest it’s been since the few years following World War II. “A larger share of what companies in the United States are producing is going to the owners, and operators of the firms and the lenders who financed the firm’s projects while a smaller percentage is going to the workforce,” claims Gary Burtless, a senior fellow in economic studies at The Brookings Institution. 
Productivity, which measures goods and services created per hour worked, jumped nearly 81 percent between 1973 and 2001, compared to a marginal increase of 10.7 percent in median hourly compensation, according to the Economic Policy Institute. These figures represent a shift from the trend between 1948 and 1973, when hourly compensation and productivity ran analogous to one another. 
 
The primary reason for the wider gap is saturated wage growth in recent years among both college-educated workers and those workers without degrees, said the Institute’s President Lawrence Mishel. National deregulation and increased global competition have also kept compensation down.
 
The split between the two figures has been acute since the beginning of the 21st century, when wage growth flattened out; and now with unemployment rising, the bulk of the workforce feels lucky just to have a job. As a result of the weak employment numbers, many companies are using their leverage to get a better deal out of their workforce. 
 
Employers are also achieving their gains with fewer workers; economic activity in the United States is 2.5 percent higher than it was when the recession struck in the latter portion of 2007 with less than 3 million workers in the labor force. 
 
Evaluating hourly compensation by itself does not tell the story because these figures do not include benefits, which make up roughly 30 percent of a worker’s compensation package. That said, costs of benefits are rising over time, which serves as a factor in the widening of productivity figures versus hourly compensation rates. 
 
Many professionals attribute the widening gap to market forces. Professionals expect the gap to narrow as the economy further recovers from the collapse of 2007. As the economy improves, the labor market will ultimately tighten, and companies will raise wages. One sector where this shift has become tangible is the energy market in the Midwest, where employers are beginning to boost compensation for their workers. 
 
 
Source: US Department of Labor
 

Interest Calculator

Interest Calculator

 
 
What is an interest calculator?
 
 
An interest calculator is a way for individuals, and businesses, to determine the expected cost, or income of giving and accepting loans.  An interest calculator can also be used by investors to determine the amount of money they can expect from returns on investments.  There are many different types of interest calculators that range from the very basic to the complex.  
 
 
Definitions
 
 
Before going into any conversation about interest calculators it is important to know the different ways that interest can be computed and how it will effect your decision making.  The three main types of interest calculators that are used in most financial transactions are simple interest; compound interest; and amortized interest.
 
 
Simple interest, as per its definition, is a very simple interest calculator.  A simple interest calculator formula will be: Interest=principal (x) interest rate (x) length of time.  For example, if you receive a loan for $1,000 for one year at an interest rate of 7% the tax calculation will be as follows:  1000 (x) .07 (x) 1.  This will give you an annual  interest payment of $70.  This is the most basic type of tax calculator, but this is usually not the case in most financial transactions.  Most financial transactions involve some form of compounding.
 
 
Compound interest is a more complex form of interest calculator.  In a compound interest calculator the amount of money interest is charged to increases over time.  This is reflected in the Annual Percentage Yield.  An example of a compound interest rate would be a savings account.  You may have a savings account that has a 4% interest rate.  When this is compounded the total interest you receive will be slightly more than 4% depending on how often that interest is compounded.  When looking for investments or picking a bank to have a savings account the amount of interest that the bank offers is only one of the factors that you should use in your interest calculator.  You should find out how often that interest is compounded.  Most banking institutions compound interest on a monthly basis.  This means that your interest on your investment will be calculated every month and every month that new figure will be subject to the interest rate for the next month.  For example, if you invest $1000 in a savings account that has a 5% interest rate that is compounded monthly then the interest calculation will look like this:
 
 
Initial investment:  $1000
 
End of month 1 at 5% interest: $1050
 
End of month 2 at 5% interest:  $1,102
 
End of month 6 at 5% interest:  $1,276
 
End of month 12 at 5% interest: $1,795
 
 
In the previous example the interest calculator works by multiplying the newly generated balance every month by the interest rate, 5%.  As you can see by having compounded interest the interest calculator generates an end of year balance of exceedingly more than if we followed the simple interest calculator, which would leave you with a year end total of $1,050.  If you have investments for extended periods of time it is often simpler to use a tax calculator that involves converting the interest rate to the power of whatever amount of time the interest will be compounded for.  For example, if you have a $1,000 investment that accumulates interest on a monthly basis at 5% interest compounded over the course of 5 years you will want to use the following calculation:
 
 
Interest=(principal (x) (1+interest rate)^(months(x)years of investment))- principal
 
Interest = (1000 (x) 1.05^(12(x)5)) – principal
 
Interest = (1000 (x) 1.05^60) – 1000
 
Interest =(1000 (x) 18.58) – 1000
 
Interest = 18,580 – 1000
 
Interest = 17,580
 
 
Credit card companies often use the same interest calculator but the amount of money that you owe on your credit card is often compounded daily.  This is one of the reasons why it is beneficial to maintain a month to month balance where you pay off the amount you owe as soon as you receive your bill.   Those individuals who maintain a high credit card balance will find that they are paying large sums of money in interest, which is akin to throwing money in the toilet.  Student loans also use compounded interest rates.  It is important, when getting student loans, to find out when they begin compounding.  Subsidized student loans do not begin compounding interest until after you have completed your education, or left.  Unsubsidized loans begin to compound interest as soon as they are taken out.  It is these loans that can cause individuals to owe exhorbitant amounts of money upon graduation.  It is important to use a interest calculator to decide how much the loan now will cost you in the future.  Find out whether, and how often, the interest on all loans are compounded by using the interest calculator. .  It may be more beneficial for you to take a loan at 4% interest compounded yearly than to take a 1% loan that is compounded on a monthly basis.  
 
 
There are also things called amortized interest .  To calculate amortized interest one uses interest calculators in a different way.  Amortized interest calculators are used when you receive a mortgage, car loan, or any other type of loan from a lending institution.  An amortized interest rate is negotiated along with a period of time for repayment.  This is usually done with large investments where payment needs to be spread out over a long period of time.  For example, when you get a mortgage for real estate you will often get a mortgage with a specific interest rate that is amortized, or depreciated, over a period, usually between 20 and 30 years.  As in the above discussion, this interest rate is compounded over the period of time of the loan.  In an amoritized interest calculator  each payment that you make will pay for the interest accumulated over that period of time and also allocate a specific amount towards the principal of the loan.  In describing how amortization works it is easier to leave out the computation for compounding.  If your mortgage is compounded over a period of months or years you should use an interest calculator that reflects that but for this example we will make it simple.  In this example you have a mortgage of $300,000 at 5% interest that is amortized over a period of 30 years that is paid on a yearly basis.  The interest that you pay is $15000 or the first year.  In addition to the interest you will also pay 1/30 of the principal.  
 
 
1st year payment = interest + 1/30 of principal
 
1st year payment = $15000 + $10,000
 
1st year payment = $25,000
 
 
By using this interest calculator you determine that your first year payment is $11,500, which includes interest and 1/30 of the principal balance.  The total principal is amortized, in that the total principal is diminished in that one year period.  As a result, your next years payment is decreased.  This happens over the course of the 30 year life of the loan until the loan is completely paid off.  Now let’s calculate the second years payment.  First you need to use the interest calculator to determine what your updated principal balance is:
 
 
2nd year principal balance = $300,000 – first years payment on principal
 
2nd year principal balance = $290,000
 
 
Once this is done you use the previous calculation to determine the payment for the 2nd year:
 
 
2nd year payment = (5% interest on outstanding principal) + (1/30  of initial mortgage)
 
2nd year payment = (5% of $290,000) + (10,000)
 
2nd year payment =$14,500 + $10,000
 
2nd year payment = $24,500
 
 
As you can see, by using the interest calculator, the total amount that is due at the end of each successive year diminishes.  This is due to the decrease in the amount of principal that interest is charged to.  This calculation becomes more complex when the interest is compounded on a monthly basis.  
 
 
Fixed and Variable Interest calculator
 
 
In addition to the basic principle of simple interest, compound interest and amortized interest there are other factors that need to be included in the interest calculator that can severely affect the amount of interest, and the long term nature of your loan, or investment.  These are the interest rates that are charged by lenders.  There are two main types of interest rates that are charged by lenders, and should be used in your interest calculator.  These are fixed interest rates and variable interest rates.
 
 
A fixed interest rate is, just like it sounds, fixed over a period of time.  If you get a loan at a fixed interest rate of 5% for the life of the loan that means that, no matter what the economic conditions, you will be charged an interest rate of 5% over the life of the loan.  For example, if you have a yearly fixed interest rate of 5% for a 10 year loan you will pay 5% interest on your outstanding balance in year one and 5% interest on your loan in year 10.
 
 
When you have a variable interest rate it gets a little more complicated and a little more risky.  In a variable interest calculator a lender will provide you with a fixed rate of a certain amount of interest on top of a variable interest that is determined by the federal reserve.  For example, your lending institution may charge you a 2% interest rate in addition to 3% interest that is designated by the federal reserve for a total of 5% interest for the life of the loan.  The interest rate charged by the federal reserve changes over time and may decrease or increase.  In the previous example, if you have a variable interest loan and the federal reserve increases its interest rate to 5% your interest will be reflected by the increase and, using the interest calculator, you will realize a new interest rate of 7%.  The interest calculator is more complex than this for the increase in the interest rate by the federal reserve will be retroactive to the beginning of your loan.  In other words, if you have a 10 year loan with a 2% interest rate from the lender and a 3% interest rate at the federal reserve level then your interest rate is 5%.   This may continue for 2 years and then the federal reserve raises interest rates for the following 8 years to 5%.  This will not only increase your interest rate to 7% but the lender will charge you more interest to make up for the diminished interest rate you paid in the first 2 years.  Essentially, for the last 8 years of your loan you will be paying an interest rate so that the life of your loan reflects an annual 7% interest rate.
 
 
Variable interest rates can have their advantages and disadvantages.  For one, the interest rate by the federal reserve may diminish, which means that the interest rate that you initially agreed to will be decreased for the life of your loan.  Those investors who have a great knowledge of the securities market can predict increases and decreases in the federal reserves interest rates and take advantage of predicting the federal reserves decisions in their interest calculators.  Variable interest calculators are also beneficial for individuals who are investing in short term projects.  Those who invest when interest rates are low are more likely profit if they invest for a short period of time before federal reserve interest rates change.  Those who are investing long term assets should stick to fixed interest rates.  Variable interest calculators are also beneficial in that there is more risk involved in a variable interest rate loan.  In that regard, lending institutions are more likely to offer variable interest rate loans at a lower interest rate than if they were to offer fixed interest rates.  The downside to using variable interest rates is that is less favorable to planning.  Because you are unaware of how much interest you will be charged in the overall investment you will need to keep money on hand in the case that interest levels increase and you are required to make larger payments than you initially intended.  
 
 

Loan Calculator

Loan Calculator

 
 
Using the loan calculator is a very simple process that allows you to estimate what your loan amounts will be without contacting a lender or viewing various loan websites.  Loan calculators have helped many people seeking loans to narrow down their search and determine what loans will be best for them.  Many different types of loan calculators are available, however many times people need only a basic loan calculator in order to see what estimated payments will be for a certain type of loan or how long the loan will take to be paid.   
 
 
A loan can be any type of debt which needs to be paid off.  Informal loans, from family and friends, occur all the time.  However, many banks and lenders are in the business of providing loans to customers who cannot afford things right away, but can instead spread the payments out over a period of time.  These banks and lenders make money from charging interest from the loans, which is calculated as a percentage of the total amount.  
 
 
Some loans have compounding interest, which means the interest will be calculated every year and interest on unpaid interest will be charged.  Other loans do not have compounding interest, which means they only charge interest from the principal, which is the original amount taken in the loan. 
 
 
Most loans require a security which the lender will hold in case the loan goes unpaid and is in default.  Most lenders, for items such as cars and homes, retain a legal right to repossess the property should the loan go into default.  These secured loans often have much lower interest rates, as the lender can always just take back the item in order to fulfill the loan amounts.
 
 
Some loans are unsecured, which means the lender retains no right to repossess property should the loan go into default.  These types of loans are typically used in student loans or personal loans.  The interest rates on these loans will typically be significantly higher.  
 
 
Loan calculators can be used for determining numerous types of loans.  Use a loan calculator for the following:
 
 
– Auto, boat, and motorcycle loans.
 
– Lease payments on a vehicle.
 
– Home mortgage loans.
 
– Student loans and financial aid for college and universities. 
 
– Business loans.
 
– Personal loans. 
 
 
Enter the data as it is asked for on the loan calculator screen.  You will need to include the following:
 
 
– Principal Amount
 
– Interest Rate
 
– Payment Period
 
– Term/Length of Loan
 
– Payment Amount
 
– First Payment Date
 
 
Once you have entered each value, select the calculate button.  You can reset your entered information at any time by pressing the reset button, or you can change each individual box at any point during the process. Once you finalize all of the numbers and press the calculate button, all available loan information will become available to you.  You may print this information, save it to your computer, or go back and change the values in order to see the effects they have on your loan information.  
 
 
Below are the definitions of each area of data which needs to be put in the loan calculator.  Better understanding each term can help you modify your loan information to get you the best loan that fits your needs. 
 
 
1. Purchase Price – The purchase price is the total sale amount of the item you are financing.  If you are unsure of the actual final purchase price, enter your best estimate into the loan calculator. 
 
 
2. Down Payment – The down payment is the upfront payment on the item you are purchasing.  Not all loans require a down payment, however many lenders will only give a loan if a certain percentage of the total purchase price is paid upfront (for example, for a home loan, this is generally 20% of the purchase price)
 
 
3. Sales Tax – If the item purchased is subject to sales tax in your state, you should enter the sales tax that will be added to your final purchase price.  If you are unsure, check online to determine if your item is subject to the sales tax and the rate in which the sales tax will be calculated.  Most states will require a sales tax on items such as cars, boats, personal items, and other similar items, and the rate usually ranges between 5% and 8%.
 
 
4. Yearly Interest Rate – The yearly interest rate is the percentage of the total loan that will be turned into interest that must be paid to the lender.  The yearly interest rate can also be referred to as the APR (Annual Percent Rate), APY (Annual Percent Yield), or just as the interest rate.  If you are using loan calculators to determine the yearly interest rate, leave this field blank and the calculator will tell you what the rate will be considering the other amounts entered in the other boxes.  
 
 
5. Payment Period 
 
 
This will determine how often you will make repayments on your item.  You can choose between paying monthly (30 day payments), annually (one payment every year), quarterly (payment every 3 months), semi-monthly (payment every 15 days), bi-weekly (payment every 14 days), and weekly (one payment per week).  You may also select a custom payment period on the loan calculator.  
 
 
– Typically, most lenders require a monthly payment on their loan.  However, you may occasionally find bi-monthly payment plans or quarterly payment plans, depending on the type of loan and your credit history. 
 
 
– The payment period must be used along with the proper length of loan.  Typically, the length of loan will highly depend on the type of loan taken.  Car loans are typically between 4 and 6 years in length.  Home loans are typically much longer, with the standard repayment 15 or 30 years.  
 
 
6. Length of Loan (Term) – The length of the loan is the overall length of time it will take to pay off your loan.  You can enter any amount of time in which to pay your loan.  If you are using the loan calculator to determine you length of loan, leave this field blank and the loan calculator will tell you how long it will take to pay your loan considering the loan amount, interest rate, and payment terms.   
 
 
7. Payment Amount – The payment amount is how much each payment will be on your loan.  Typically, this is what most people want to find out when using loan calculators, as this is the payment you will be responsible every payment period.  Leave this area blank in order for the loan calculator to tell you what your payment amounts will be. Note that you must enter a length of loan, interest rate, and loan amount in order to get your payment amount.  
 
 
8.  First Payment Date – The first payment date is when you will first start making payments.  The loan calculator does not require this information in order to perform its basic functions, however entering a first payment date will provide you with a more accurate description of when your overall payments will end and the loan will be fully paid off. 
 
 
Note:
 
 
– Loan calculators for mortgage loans may provide slightly different information than a standard loan calculator.  This is because taxes, insurance, and PMI must all be calculated into the total price of purchasing a home, which are often much more significant amounts than for smaller personal and business loans. Indicate on the loan calculator if you are attempting to figure out mortgage loan information or you can use one of our other loan calculators geared towards home mortgage payments.  
 
 
– Payment Amortization – Amortization is a map that details every payment that will be made during the life of a loan and exactly when those payments will be due.  They spread the payments out according to the length of the loan and detail each payment according to the payment period.  This can be a valuable tool in showing exactly how your loan will be paid off and how often you will need to make your payments.  It provides a good visual for those who have trouble envisioning exactly what their loan payments will look like over an extended period of time.    
 
 
– While the loan calculator can usually provide accurate numbers to determine your loan obligations, you should always consult with the lender about the terms of your repayment.  The online loan calculators should only be used to provide you with a general framework of how your loan will look and your estimated monthly or quarterly payments.  
 
 
– Many lenders also require additional fees and expenses, which cannot be put into the loan calculator.  Therefore, you should always expect a slightly higher loan amount than the purchase price. Contact your lender or lenders you are considering to determine what their fees and expenses may be.  Do not agree to any loan in which fees and expenses are brought to your attention right before signing, as you should be given these amounts well in advance to consider whether you can pay this loan within your budget.  
 
 
Tax Issues
 
 
The following are the generally accepted guidelines concerning loans and income tax in the United States.  If you have concerns about the tax implications on your loans, consult with a tax professional or further explore the tax laws using legal resources available online. 
 
 
1. A loan is not gross income for the borrower.  Because the borrower is under obligation to repay the loan, it is not considered taxable income despite the transfer of funds. 
 
 
2. A lender may not deduct the loan amount from their gross income.  Just as a loan is not considered income, it also cannot be used as a deduction when it is given. 
 
 
3. Any amounts paid to satisfy the loan are not deductible by the borrower and is not considered income to the lender.
 
 
4. The interest paid on a loan is considered income for the lender.  This is money made off the loaning the money, so it is therefore listed as gross income.
 
 
5. Likewise, a borrower can deduct the expenses of interest payments, however this generally only applies to loans taken for business purposes.  Personal loans generally are not deductible, unless special rules apply. (Student loans and home mortgages are examples of loans that are given special tax treatment).