I was using a Mortgage calculator that displays the steps used to arrive at the answer, but I have a question on one of the basic steps. It reads

You want the loan payment schedule for the following loan:

- Amount of the loan: $120000
- Duration of the loan: 30 years
- Payments per year: 12
- Annual interest rate: 4.5 %

Your annual interest rate converted to a decimal is 4.5% / 100.0 = 0.045.

- You will have 12 × 30 = 360 total payments to make.
The interest rate at each payment is 0.05/12.00 = 0.0038.- You can calculate the amount of each payment using this formula:

My question is where is this .05 value in the numerator coming from? How is it calculated? Once you obtain the .05 and complete the operation .05/12 that does not equal .0038 it equals .0042 (rounded up)

Thanks