Page 76 - Book3E

Loan Payment #
Initial Balance
5 $13,485
$383/Month Balance
$283/Month Balance
$15,000 $13,887 $12,752 $11,593 $10,409 $9,201 $7,967 $6,707 $5,421 $4,107 $2,766 $1,397
$15,000
10
15
20
25
30
35
40
45
50
55
60
$11,837 $10,154 $8,436 $6,682 $4,891 $3,062 $1,195 $0
–
–
– $0
Total Interest: $1,429 $1,984 Total Overall Savings: $555 and about 1.5 years of payments
68
debt it is interest free, and it powerfully lowers the principal on which the interest is figured. This important principle works for you because, by lowering the principal amount of the debt, it reduces the interest computed on the principal. Good things happen when you make extra payments, even if you only make one extra payment per year. This strategy works whether you are paying an extra payment on a mortgage or on a credit card debt. The concept remains the same. If you lower the principal on which interest is computed, the interest computed on that principal has to be reduced.
Amortization Schedule
What to Do With Extra Money