MonthlyWıse

How Our Calculators Work

Last updated: October 27, 2026

Every MonthlyWise calculator is meant to show its work. This page explains the formulas each tool uses, the assumptions behind the estimates, where outside data comes from, and how we check and correct our numbers. Each calculator page also has a short "How this calculator works" box with the assumptions for that tool.

Who builds and checks the tools

MonthlyWise is built by Sumit O., a developer with a degree in Computer Information Systems. Each calculator is tested against hand-worked examples before it goes live, and the figures in our guides are produced with the same formulas as the calculators, so the two always agree. For example, our PMI guide and the mortgage calculator give the same PMI cancellation dates for the same loan.

General principles

  • Standard formulas. Loan payments use the same amortization formula lenders use. We don't invent proprietary scores or ratings.
  • Estimates, clearly labeled. Where we have to assume something, like a PMI rate or how fast a car loses value, we say so next to the result and let you type your own number where possible.
  • Your numbers stay on your device. Calculations run in your browser. See our privacy policy for details and how to check this yourself.
  • Monthly compounding. Unless a tool says otherwise, interest is charged monthly at the annual rate ÷ 12. Lenders and card issuers sometimes calculate interest daily, so real figures can differ by a few dollars.

Loan payments

The mortgage, auto loan, and personal loan calculators use the standard fixed-rate amortization formula:

M = P × r(1 + r)ⁿ ÷ [(1 + r)ⁿ − 1]

where M is the monthly payment, P is the amount borrowed, r is the annual rate ÷ 12, and n is the number of monthly payments. Each month, interest is the balance × r, and the rest of the payment reduces the balance. Extra payments go entirely to principal.

Mortgage calculator

  • Property tax by ZIP code comes from U.S. Census Bureau, ACS 5-year 2020–2024 data: aggregate real estate taxes paid divided by aggregate home value in each ZIP code (or the county or state when a ZIP has too little data). These are averages for current owners; recent buyers in states with assessment caps often pay more, and the calculator notes this for those states.
  • Conventional PMI is estimated from your credit score range and down payment using typical published mortgage insurance rate cards for 30-year fixed loans, about 0.19% to 1.86% of the loan per year. Real quotes vary by insurer and lender, so you can enter your own amount.
  • PMI end dates follow the Homeowners Protection Act: you can request cancellation when the balance reaches 80% of the home's original value, and it ends automatically at 78% on the original schedule or at the loan's midpoint.
  • FHA, VA, and USDA costs use the programs' published rates: FHA's 1.75% upfront premium and 0.15% to 0.55% annual premium (per HUD Mortgagee Letter 2023-05), the VA funding fee table, and USDA's 1% upfront and 0.35% annual guarantee fees. Upfront fees are assumed to be added to the loan.
  • Affordability uses the 28/36 rule on gross income: housing costs up to 28%, and all debt payments up to 36%.

Auto loan calculator

  • The amount financed is the vehicle price plus upgrades, financed add-ons, taxes, and fees, minus your down payment, trade-in equity, and cash rebates.
  • Sales tax treatment of trade-ins, rebates, and add-ons varies by state, so each is a switch you can turn on or off rather than a fixed rule.
  • The "upside down" estimate compares your scheduled balance with a rough car value: a new car losing about 20% in its first year and 15% a year after, or a used car losing about 15% a year. Real depreciation varies widely by make, model, and mileage.

Credit card payoff calculator

  • Each month, interest of APR ÷ 12 is added to each balance, then payments are applied. In Advanced mode, every card gets its minimum payment first, and the rest goes to the target card: the highest APR (avalanche) or the smallest balance (snowball).
  • The minimum-payment comparison models a shrinking minimum using a common issuer formula: 1% of the balance plus that month's interest, with a floor of about $25. Your card's formula may differ; your statement shows its own estimate.
  • Promotional rates are treated as temporary rates, not deferred-interest offers.

Budget calculator

  • Weekly amounts are converted to monthly as × 52 ÷ 12, every two weeks as × 26 ÷ 12, and yearly as ÷ 12.
  • The budget checkup compares your numbers with common guidelines as a share of take-home pay: needs 50%, wants 30%, savings 20%, housing 30%, transportation 15%, and non-housing debt payments 10% (the 20/10 rule). These are rules of thumb, not requirements.
  • Savings projections assume the same deposit every month and a steady return compounded monthly, before taxes and inflation.

Savings and rent vs. buy

  • The compound interest calculator uses the standard future-value formulas for a starting balance plus regular deposits, with optional inflation adjustment, the same approach used by calculators like the SEC's Investor.gov tool.
  • Rent vs. buy compares net worth. Both households start with the same cash: the buyer spends it on the down payment and closing costs, and the renter invests it. Each month, whoever has the lower housing cost invests the difference. The buyer's net worth is home value minus selling costs and the loan balance, plus investments.

Savings goal and emergency fund calculator

  • The emergency fund target is your essential monthly expenses times the months of cover you choose. Suggestions are 3 months for two steady incomes, 6 for one income or dependents, and 9 for self-employed, commission, or seasonal income.
  • Deposits are made at the end of each month, and interest is added monthly at (1 + APY)^(1/12) − 1, so a year of interest matches the APY.
  • The monthly amount for a deadline is solved from the future value of your current savings plus an ordinary annuity. Taxes on interest, fees, and inflation aren't included.

Debt payoff calculator

  • Each month, interest is added to every debt at its annual rate divided by 12, every minimum is paid, and the extra goes to the target debt: the highest rate (avalanche) or the smallest balance (snowball), re-checked monthly.
  • The total monthly payment stays fixed, so a paid-off debt's minimum rolls to the next target. "Minimum payments only" pays each minimum with no extra and no rollover.
  • Minimum payments and rates are fixed; plans that don't finish within 50 years are shown as not paid off.

Take-home pay calculator

  • Pre-tax deductions come out first: traditional 401(k) and 403(b) contributions (capped at the 2026 limit of $24,500) and Section 125 benefits such as health premiums, HSA, and FSA.
  • Federal income tax is the 2026 yearly tax on the remaining wages, using the same engine as the tax refund estimator, spread evenly over your paychecks. Refundable credits are shown separately because they arrive with the tax refund.
  • Social Security is 6.2% up to the $184,500 wage base and Medicare 1.45%, plus 0.9% on wages over $200,000. 401(k) contributions are subject to both; Section 125 benefits aren't.
  • State income tax uses the same 2026 state tables as the tax refund estimator. California SDI is included at 1.3%; other state paid-leave payroll taxes aren't.

Tax refund estimator

  • Federal income tax for tax year 2026 uses the brackets, standard deductions, capital gains bands, and credit amounts published in IRS Revenue Procedure 2025-32, plus the 2025–2028 deductions for tips, overtime, seniors, and car loan interest.
  • The order follows Form 1040: income, adjustments, AGI, deductions, taxable income, bracket tax (with qualified dividends and long-term gains in their own 0%/15%/20% bands), nonrefundable credits, other taxes such as self-employment tax, then payments and refundable credits.
  • State income tax uses each state's 2026 rates, brackets, standard deduction, and exemptions from the Tax Foundation's annual state table, starting from federal AGI. It skips state credits and state-specific adjustments, the alternative minimum tax, and less common federal credits. Every case is checked against hand-worked returns before release.

Split Expenses and invoices

  • Split Expenses works in whole cents. When an amount doesn't divide evenly, the leftover cents are spread one at a time so every split adds up exactly to the expense. Settle-up suggestions pair the people who owe with the people who are owed to keep the number of payments small.
  • The invoice generator totals line items, then applies any discount and tax you enter. Invoices are built in your browser and never sent to us.

Limits of these estimates

Calculators can't see your credit report, your lender's fees, your exact local tax rates, or how rates will change. Treat results as a way to compare options and plan, then confirm the details with your lender or a qualified professional. See our disclaimer.

Reviews and corrections

We review each calculator when we add features and whenever the underlying rules or data change, such as new FHA premiums or the yearly Census data release. If you think a result is wrong, email sumit.o4172@gmail.com with the inputs you used. We check every report, and when we fix a mistake we update the calculator and any guide that uses the same numbers.

Sources