Calculator Methodology

How PayoffCalc calculators compute results — formulas, assumptions, verification, and limitations.

Last updated: September 26, 2026

How our calculators work

Every PayoffCalc calculator runs entirely in your browser using JavaScript. Your inputs are never sent to a server (see Privacy Policy). Each tool implements standard, textbook financial formulas — the same math a bank or spreadsheet uses — and shows you the breakdown, not just the headline number.

Verification

Calculator logic is unit-tested against independently computed values before release:

  • Credit card payoff: month-by-month amortization simulation cross-checked against the standard payoff formula; impossible-payment detection (when interest exceeds the payment) verified.
  • Loan amortization: payment formula `M = P·r(1+r)ⁿ/((1+r)ⁿ−1)` verified against published amortization tables; extra-payment and biweekly schedules validated by simulation.
  • Reverse sales tax: `pre-tax = total ÷ (1 + rate)` verified against forward-tax computation.
  • Projections (457(b), VOO, compound interest): future-value-of-annuity math verified against closed-form formulas.
  • Dividend estimators: `annual income = investment × yield` — simple by design; the key input (yield) is user-assumed and labeled as variable, never presented as guaranteed.

Edge cases are tested explicitly: zero interest rates, zero balances, payments too small to cover interest, and empty inputs.

Assumptions we disclose

Each calculator page documents its assumptions. Common ones:

  • Interest compounds monthly unless stated otherwise.
  • Projections assume a constant rate of return — real markets vary; see the Financial Disclaimer.
  • Tax treatment is simplified; consult a tax professional for your situation.
  • Fees, inflation, and plan-specific rules (vesting, loan provisions) are noted where relevant but not modeled unless the tool says so.

What calculators can’t do

A calculator computes; it doesn’t advise. It doesn’t know your emergency fund, your job stability, your tax bracket, or your goals. Use outputs as a starting point for decisions — not the decision itself.

Reporting a math error

If you believe a calculator is wrong, tell us via the Contact page with your inputs and expected result. Math errors are treated as top-priority fixes.