Getting to grips with missing pennies

Over the past few years, I’ve created an awful lot of amortization schedules for loans, by hand and via code. As I read around the subject, I kept seeing references to ‘missing pennies’, but never really understood what was being written about. The way I do my calculations, I don’t get any ‘missing pennies’!

At last, with the help of Microsoft Copilot, I finally understand. I asked Copilot to look at the webpage Business Math: 13.3 AMORTIZATION SCHEDULE, and explain the ‘missing pennies’ section, and it did just that, first time.

As a result, I’ve written a document explaining the process:

Click here for the PDF document ‘Explaining Missing Pennies in Amortization Schedules’

So why hadn’t I understood it before now? Because I think about loan schedules as a programmer, and ‘missing pennies’ are only a thing if you do all the rounding at the same time, and it wouldn’t cross my mind to do that.