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Extra Amount |
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Extra Amount
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The Extra Payment loan type will allow you to compute the payment value (and
other values) when extra payments are involved. It will also allow you to determine
the savings in both time and interest when compared to normal payment series.
The Payment amount first, then using the Extra Payment feature, the Period.
Enter in the information in the example on your form and compare it to the form
illustrated below.
Extra Amount - EXAMPLE |
Helen and Barry Moore bought a $159,000 house on June 15, 2011. They financed it with a $143,000 ($159,000 - $16,000 down payment), 30 year mortgage at 12.75% annual interest. The first payment is due on July 15, 2011. If Helen and Barry paid an extra payment every 12 months, how much interest and time could they save? |
This example must be solved in two steps.
Solve The Payment amount first.
Enter all the known data into the correct fields. See illustration below.
Press
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The monthly payment is $1,553.97 |
Next...
Solve The Period.
Since we know the monthly amount ($1,553.97) And the example states that one extra payment was made annually,we can use the extra payment and frequency fields to solve the amount of time we will reduce from the 30 year period.
Press
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The reduced period is 18.75 years.
You can change the frequency to Months and click the compute button again to get a value of 225 months. |
