Every week, StopBuyingCrap.com will show you nifty financial tricks you can do online that will hopefully make your life a little bit easier.  From reviewing the latest personal finance apps and websites, to tools that can help you save money and shop savvier, we’ll cover as many of them as possible. If you have or know about a tool/website that you feel should be highlighted, please feel free drop us a note!

Useful Answer Engine That You Probably Haven’t Heard Of

Wolfram Alpha has been out for almost a year now, but unless you’re a geek, you probably haven’t heard of the website.  If you don’t know about it, Wolfram Alpha is an “answer engine,” and it does this job fairly well — especially if you know the proper query to input. For example, you can quickly search for “earthquake in Haiti since January 12, 2010” and Wolfram Alpha will spit out an epicenter location chart, timeline of quakes/aftershocks, and their magnitude level.

Compared to results from search engine that you’ll have to dig, sort, and read through, Wolfram Alpha is especially useful when you need to know specific data.

Because of its clear digestion of answers, Wolfram Alpha also makes for a great tool when you use it as a mortgage or credit card interest rate calculator.  Here’s an understatement of the year: there are a lot of mortgage and credit card interest rate calculator on the web.  As a financial nerd, you may already be familiar with many of them. Some are incredibly detailed, functional, and works like a charm.  If you already found one you like, super!   (Feel free to share them in the comment below).  But if you’re still trying to find a no-frills calculator that won’t bombard you with advertisement or up-sale pitches, Wolfram Alpha may just be what you’re looking for.

Fixed and Adjusted Mortgage Calculator

To use Wolfram Alpha to calculate mortgages, type your query with “mortgage, amount, rate, duration.”

So, for a 15-year, $150,000, 4.75% fixed rate mortgage, you can type:

mortgage $150,000, 4.75%, 15 years

… and Wolfram Alpha will immediately spit out a result. You don’t really need to use comma, or order the search query in any particular way, but you will definitely need the key values mortgage, amount, rate, and duration.

15-year fixed mortgage, 4.75%, $150,000

In its default result, Wolfram Alpha will assume this is a fixed mortgage you’re calculating. If you want results for an adjustable mortgage, simply click on “Use adjustable mortgage rate instead.”

In the first section of the default result, you’ll see a monthly payment calculator and effective interest rate.  For our example, we see that the estimated monthly payment is $1,167 and the effective interest rate is 4.855%

In the second section of the result, you’ll see total amount of the mortgage if you stick with the payment plan. For our 15-year fixed mortgage, you can see that the total payments amount to $210,015.  If you do an immediate search and change the mortgage to a 30-year fixed, you’ll see that the total payment amount went up $71,000 to $281,690 — a clear reminder that if you can afford it, you’re much better off with 15-year mortgages.

30-year fixed mortgage, 4.75%, $150,000

Going further down the result page, you’ll see additional information such as monthly payment breakdown chart along with remaining balances through the loan period (15 years). Along with the payment table, you’ll be able to immediately visualize just how much % of interest you’re paying initially vs. principal paid.  For example, in the first year you’ll be paying almost 50/50 in terms of interest and principal, but the ratio will quickly change as thankfully this is a 15-year fixed mortgage.

You can spice things up a bit (as exciting as mortgage calculation can be) by choosing the other options Wolfram Alpha provides you with. For example, you can select “sale amount and down payment” to get a computation result with down payment included.  Clicking on “interest-only period” will give you another clear indication that interest-only mortgages are simply a bad deal.

The “same” 15-year fixed mortgage will now cost you an additional $14,351 in interest:

Wolfram Alpha Finance Mortgage Calculator
15-year mortgage, w/ interest-only, $150,000

Wolfram Alpha Finance Mortgage Calculator

Credit Card Interest Rate Calculator

If the mortgage calculator functionality impresses you, the credit card calculator will blow you away (okay maybe not, since its pretty much the same deal). To use Wolfram Alpha to calculate the cost of a credit card balance, you’ll need to type in “credit card, rate, and balance.”

So for a $8,000 credit card balance on a 14% APR card, you type:

credit card, 14%, $8,000

And you’ll see a similar result page such as the mortgage calculator. A payment pie chart will show you the amount of principal and interest you’ll be forking over if you stick with the default monthly payment that Wolfram Alpha computed (which unfortunately isn’t the current 4% minimum payment required by law).

But if you scroll down you can quickly see the loan period comparison chart which will show you how much total interest you’ll pay (or save) when you put more into the monthly credit card payment.  Nothing surprising there, of course.

Credit Card Monthly Payment Comparison

Though the credit card cost calculator isn’t as in-depth as the calculator from the Federal Reserve/FTC, which allows you to specify the exact monthly payment you can put in each month or the number of years you want to pay off your card, Wolfram Alpha’s tool is still a quick way to instantly visualize how much your credit card balance will cost you.

More Than Just Calculators

Beyond the handy dandy calculators highlighted above, Wolfram Alpha also has a wide range of useful money and finance data you can your hands on. You can easily compare stocks quotes and #’s from 3 different companies such as MSFT, AAPL, and GOOG:

Or you can check out quotes from mutual funds, futures contract, calculate bond valuation, compound interest rates, derivatives valuation, sales tax, and even estimated salary for specific occupations!  For example, registered nurse salary:

Lastly, take a look at the example list page for money & finance from Wolfram Alpha to see the various type of computation and data results you can get your nerdy hands on, and if you find Wolfram Alpha useful, you should definitely bookmark the page future reference.

Don’t forget to check back next week for our next “finance hack” installment where we’ll cover more nifty financial tricks — perhaps something tax related for all those procrastinators like yours truly? If you already have some financial calculators you can’t live without, feel free to share them below.