Calculation methodology and assumptions

REALLY.YOU puts alternatives on the same timeline, separates principal or retained equity from consumed cost, keeps full precision before display rounding and presents uncertain inputs as scenarios.

Core calculation rules

Cash-flow timing

Unless a tool says otherwise, payments happen at the end of each month. We divide an annual nominal rate by 12 and treat months as equal calculation periods. Displayed values are rounded, but the calculation keeps full JavaScript precision.

Fixed-rate payment

Payment = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)

P is principal, r is the monthly rate and n is the payment count. When the rate is zero, payment equals P ÷ n.

True APR estimate

Net proceeds equal principal minus mandatory upfront fees. We find the monthly rate that makes those proceeds equal the present value of payments and recurring charges. The annual estimate is (1 + monthly rate)¹² − 1.

Ownership and uncertainty

Set one cost boundary

Each ownership tool states a holding period. It adds acquisition, financing and operating costs inside that period. Expected resale value or retained equity is shown separately.

Use a range for unknowns

Repairs, future rates and resale value are not facts. Run a low, base and high case. If a small change reverses the result, the choice is sensitive rather than settled.

Limits and quality controls

What is excluded by default

Taxes, legal rules, deductions, opportunity cost, inflation, sale costs, behavioral penalties and optional products are excluded unless the tool asks for them. An exclusion means the site cannot infer the item safely. It does not mean the item is unimportant.

What every published calculation must do

Define the amount, timing and cost boundary being compared.
Separate principal or retained equity from money that is consumed.
Show the formula or cash-flow method used to produce the result.
Test zero-rate, short-term and other edge inputs without returning an invalid number.
Label examples as illustrative, disclose exclusions and support material factual claims with primary sources.

See the method in action with the True APR Calculator, compare the wider framework in Total Cost of Ownership, and review the editorial quality standard.

Version reviewed October 22, 2026. A material method change should update this date and the affected calculator explanation.