How much interest saved - Monthly extra payment
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UUID | 76189976-71e0-11e3-84d9-bc764e202424 |
This equation will return the total interest saved on a loan if an extra monthly payment is paid in each month.
INPUTS.jpg)
- P -original principal amount of the loan
- n -number of years of the loan term
- i - interest rate input as a percentage; i.e., entered as 4.6 for a 4.6 % interest rate
- extra_pay - Extra payment amount added to each month's payment
NOTES
This equation will do an amortization and calculate the total interest paid during the life of the loan. It will then also calculate the amortization with an extra amount paid each month in addition to the standard loan payment. It will then calculate the total amount of interest that could be saved over the life of a loan when making the extra monthly payment.
If the extra payment each month is left blank, the amount reported will be the standard interest paid when paying off a loan with no extra payments.
This equation can be used to answer questions of the form:
What happens if I add an extra 10$ to my monthly mortgage payment? How much cost due to interest will I save at the end of my load period ?
EXAMPLE
A typical 30 year loan at 6% interest for $50,000 will have a monthly payment of around $300.
With this example, if you make an additional $10 payment each month, it will save $5732.52 over the life of the loan
REFERENCE
[1] LuMaxArt Golden Guys APR Home Moving Concept
Source: Flickr / Scott Maxwell
URL: https://www.flickr.com/photos/lumaxart/2298394906/in/photolist-4v6SJo-f3yKch-4HWXEh-aBzgV4-5vSvLu-7Lhsj5-e2GVvf-6CfXf8-zgjyn-5YSqRa-Ukwt7-96sPRN-bAh7By-jFCErT-bAjNG7---------brKH3j-5PHfun-hs8PLu-bSpsTP-4RqbDm-9krBka-djftK2-5PHfur-aUGnoR-6fzDVG-5pnpvQ-c81hoA-jLeLJR-36ZS6c-enEdno-en5w3D-brGbFG-brHePm-5PHfuR-5gWZgF-aZcfDv-5vNbG8-7fpLCi-5weHPu-aVkr5g-7ftCH1-7ftD8W
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