Calculating the cost of waiting longer for money
This looks correct to me, for simple interest. If you are dealing with compound interest, the formula would be: So, A = 500000(1+0.036/365)^(30), or 501,481.57, or an interest of 1481.57, assuming the 3.6% is the annual nominal interest rate and it is compounded daily. Note that you are ignoring the depreciation and also ignoring the percentage of customers who will forfeit their debt in the 30 - 60 day period. The cost of an extra 30 days is $1459.80
Here's a great Canadian college/university cost calculator I used; found at Canadian Business - they say: Our tool is divided into three easy   steps. First, calculate the tuition   cost for the university and faculty   you wish to attend. Then, calculate any additional fees   for residence (on campus student   housing), meal plans, athletics,   health and student services. This will   give you the total cost a student will   pay at a Canadian university in   2006/7. Once you know the total annual cost,   take the third step to calculate the   total cost for the duration of the   course of study. Of course, this only calculates what it will cost you NOW, not eighteen years from now, but it's a good start :) Both seem to be reasonable. To decide you need to guess if the value of the house will go up or down between now and when you sell. If you think the value will go up - reach a calculation agreement now. If you think the value will go down - wait until the house is actually sold. So ya pays yer money, and ya takes yer chances... I think I understand the two scenarios Unless you are absolutely confident that you understand both scenarios - make sure your lawyer gets involved and explains them to you until you do understand. How does compounding of annual interest work? answers this question. It's not simple compound interest. It's a time value of money calculation similar to mortgage calculations. Only the cash flow is the other way, a 'deposit' instead of 'payment'. When using a finance calculator such as the TI-BA35 (Note, it's no longer manufactured, but you can find secondhand. It was the first electronic device I ever loved. Seriously) you enter PV (present value) FV (future value) Int (the interest rate) nPer (number of periods) PMT (payment).  For a mortgage, there's a PV, but FV = $0. For you, it's reversed. PMT on this model is a positive number, for you it's negative, the amount you deposit. You also need to account for the fact that a mortgage is paid on day 31, but you start deposits on Day 1. See the other answer (I linked at start) for the equations. Ignore sunk costs and look to future returns.  Although it feels like a loss to exit an investment from a loss position, from a financial standpoint you should ignore the purchase price.  If your money could be better invested somewhere else, then move it there. You shouldn't look at it as though you'll be more financially secure because you waited longer for the stock to reach the purchase price.  That's psychological, not financial. Some portion of your invested wealth is stuck in this particular stock.  If it would take three months for the stock to get back to purchase price but only two months for an alternate investment to reach that same level, then obviously faster growth is better.  Your goal is greater wealth, not arbitrarily returning certain investments to their purchase price. Investments are just instrumental.  You want more wealth.  If an investment is not performing, then ignore purchase price and sunken costs.  Look at the reasonable expectations about an investment going forward. "There is no formula that can be applied to most variations of the problem you pose.  The reason is that there is no simple, fixed relationship between the two time periods involved: the time interval for successive payments, and the time period for successive interest compounding. Suppose you have daily compounding and you want to make weekly payments (A case that can be handled).  Say the quoted rate is  4.2% per year, compounded daily Then the rate per day is 4.2/365, or 0.0115068 % So, in one week, a debt would grow through seven compoundings.  A debt of $1 would grow to 1 * (1+.000225068)^7, or 1.000805754 So, the equivalent interest rate for weekly compounding is 0.0805754% Now you have weekly compounding, and weekly payments, so the standard annuity formulas apply. The problem lies in that number ""7"", the number of days in a week.  But if you were trying to handle daily / monthly, or weekly / quarterly, what value would you use? In such cases, the most practical method is to convert any compounding rate to a daily compounding rate, and use a spreadsheet to handle the irregularly spaced payments." Well, people have been saying interest rates have to go up for years now and have been wrong so far.  Also there is an opportunity cost in waiting to buy - if another five years passes with nothing happen, you earn 0% on checking accounts, but at least earn 1.65% per year or so on your 10y bond. Happy to help.   I always recommend you try and solve these types of problems by hand over financial calculators so that you can get a feel for how terms in the equation relate to one another. That's important while you're studying/learning.  But for work--by all means you should use the fastest method, which is probably excel. I know this can be confusing because you tend to think of money being worth the face value. So let's eliminate that for the sake of an example that will be easier to understand. Let's say your friend loaned you rock worth $10 today. He expects you to pay him back an identical rock whenever you can. Now let's also assume that historically the price of rocks tends to go down every year. At some point you will need to buy a rock to pay your friend back. Because they keep getting cheaper, it costs less to buy the payback rock the longer you wait. Replace a dollar with a rock in the example and you have your answer. This is known as the time value of money. In reality, this is priced into the loan (via the interest rate) because the lender very much understands the math going on here. Also, it is more complicated because the longer you delay payment the more interest you pay (pebbles if you will) so it doesn't usually work to your advantage unless they underpriced the loan's interest rate.