Monthly interest and rounding
For each modeled month, the engine divides the annual percentage rate by 12 and applies that monthly rate to the opening balance. Monthly interest is rounded to the nearest cent before it is stored in the schedule.
Money is represented as integer cents through the payoff calculations. This avoids accumulating formatted currency strings or fractional cents across the schedule.
Payment order and final payments
Interest is added to the opening balance before the modeled payment is applied. A payment cannot exceed the principal and interest due, so the final payment is capped at the remaining amount.
A valid payment must reduce principal. If it does not, the engine returns a non-amortizing validation error instead of a payoff date.
Portfolio strategies
The Minimum Plan applies each debt's stated minimum payment and does not apply the shared extra payment. Snowball and avalanche use a fixed monthly budget equal to the starting minimum payments plus the shared extra payment.
Snowball targets the lowest current balance. Avalanche targets the highest APR. A tie uses stable original input order. When a debt reaches zero, unused strategy money can move to another active debt in the same month.
Scenarios and Master Plans
Scenario Lab applies an immutable change to the baseline input, then calls the existing payoff engine again. Extra payment, spending reduction, extra income, combined, and selected-debt APR scenarios do not use separate interest math.
The Debt-Free Master Plan aggregates existing strategy, scenario, milestone, and schedule results. It does not simulate payments or reinterpret financial values inside the interface.
Dates, limits, and lender differences
The first modeled payment occurs one calendar month after the calculation date. Payoff dates use the final modeled payment month, with calendar-day clamping for shorter months.
A simulation must reach zero within 1,200 months and remain inside safe numeric bounds. Lender statements can differ because of daily interest, fees, payment timing, variable rates, minimum-payment rules, new transactions, or issuer-specific rounding.