Chapter 5 Time Value of Money 1. What is the difference between simple interest and compound interest? a. Compounding Interest https://www.youtube.com/watch?feature=player_embedded&v=-qgdMTbTJlA Simple interest pays only on principal Compound is the way the world works b. In the worksheet, is there something special that needs to be done for a present value amount? Negative cash flows represent outflows ; investments We must “tell” the computer which way the cash is flowing 2. If you were to invest $3,000 today, what would it be worth in 1 year if you can earn 10% on your investments on average? 2 Years? 5 years? 3000 * 1.10 = $3,300 Future Value (FV) Present Value (PV) Annual Interest Rate (I/Y) Time in Years (N) Compounding Freq. (m) (P/Y) Future Value (FV) Present Value (PV) Annual Interest Rate (I/Y) Time in Years (N) Compounding Freq. (m) (P/Y) Solve for PV -$3,000.00 10.00% 2.00 Solve for FV $3,630.00 FV (Continuous Compounding) $3,664.21 Solve for Interest Rate 1 Solve for PV -$3,000.00 10.00% 5.00 Solve for FV $4,831.53 FV (Continuous Compounding) $4,946.16 Solve for Interest Rate 1 What is the difference between 1 year and 2 years above? Can you explain the difference? Interest earns interest 3. What does the word value or worth mean to you? What would you pay What should the price be? If you could hold it in your hands, how much would you have? 4. When you were 10 years old your grandfather tells you that upon college graduation he will give you $30,000. Inflation is expected to be 3.5%. What is this amount worth as a 10 year old? Assume graduation at 22. Future Value (FV) Present Value (PV) Annual Interest Rate (I/Y) Time in Years (N) $30,000.00 Compounding Freq. (m) (P/Y) Solve for PV 3.50% 12.00 -$19,853.50 Solve for FV FV (Continuous Compounding) Solve for Interest Rate $0.00 1 5. When you retire at age 65, your retirement fund promises to pay you $150,000 the first year of your retirement. If inflation is 4%, what is this worth to you in today’s money? How old are you? N = Future Value (FV) Present Value (PV) Annual Interest Rate (I/Y) Time in Years (N) Compounding Freq. (m) (P/Y) $150,000.00 Solve for PV 4.00% 40.00 -$31,243.36 Solve for FV FV (Continuous Compounding) Solve for Interest Rate $0.00 1 a. If the company can earn 12% on its retirement investments, how much must they put away today to get the above payment? Future Value (FV) Present Value (PV) Annual Interest Rate (I/Y) Time in Years (N) Compounding Freq. (m) (P/Y) $150,000.00 12.00% 40.00 Solve for PV -$1,612.02 Solve for FV FV (Continuous Compounding) Solve for Interest Rate 1 6. What are some examples of cash flows that are annuity cash flow streams? Loans Retirement plan contributions $0.00 Systematic savings plans 7. What is the difference between an annuity due and an ordinary annuity? Annuity due starts today / investment problems Ordinary annuity starts end of the period / corporate cash flows & loans Draw time line 8. If you started at age 19 to save 2,000 per year at the end of the year and could average 11% per year in earnings, how much would you have at retirement at age 65? Future Value (FV) Present Value (PV) Annual Interest Rate (I/Y) Time in Years (N) Compounding Freq. (m) (P/Y) 11.00% 46.00 Solve for PV $0.00 Solve for FV FV (Continuous Compounding) Solve for Interest Rate $0.00 $0.00 1 Solve for Time Is this an Ordinary Annuity (y/n) Payment (PMT) (A) Growth of an Annuity Growth of a Perpetuity y -$2,000.00 Effective Interest Rate 11.000% PVA PMT for PVA Interest for PVA (per period) #NUM! FVA $ 2,192,337.60 9. Would it make a difference if you started at the beginning of the year instead of the end? How much? Future Value (FV) Present Value (PV) Annual Interest Rate (I/Y) Time in Years (N) Compounding Freq. (m) (P/Y) 11.00% 46.00 Solve for PV $0.00 Solve for FV FV (Continuous Compounding) Solve for Interest Rate $0.00 $0.00 1 Solve for Time Is this an Ordinary Annuity (y/n) Payment (PMT) (A) Growth of an Annuity Growth of a Perpetuity n -$2,000.00 Effective Interest Rate 11.000% PVA PMT for PVA Interest for PVA (per period) #NUM! FVA $ 2,433,494.74 10. If you started saving $1,500 per year on a monthly basis for 18 years for your child’s college education, how much would you have if you invested and earned 8%? 12%? Future Value (FV) Present Value (PV) Annual Interest Rate (I/Y) Time in Years (N) 8.00% 18.00 Compounding Freq. (m) (P/Y) Solve for PV $0.00 Solve for FV FV (Continuous Compounding) Solve for Interest Rate $0.00 $0.00 12 Solve for Time Is this an Ordinary Annuity (y/n) Payment (PMT) (A) Growth of an Annuity Growth of a Perpetuity y -$125.00 Effective Interest Rate 8.300% PVA PMT for PVA Interest for PVA (per period) #NUM! FVA $ 60,010.77 11. You have analyzed your retirement plan and have concluded that you need 3,850,000 at age 62. If you can invest at 12% on average, how much must you invest monthly to achieve the financial goal? Age 25 Future Value (FV) Present Value (PV) Annual Interest Rate (I/Y) Time in Years (N) $3,850,000.00 12.00% 37.00 Compounding Freq. (m) (P/Y) Solve for PV Solve for FV FV (Continuous Compounding) Solve for Interest Rate -$46,427.02 $0.00 12 Solve for Time Is this an Ordinary Annuity (y/n) Payment (PMT) (A) Growth of an Annuity Growth of a Perpetuity y Effective Interest Rate 12.683% PVA PMT for PVA $ (469.94) Interest for PVA (per period) #NUM! FVA PMT for FVA $ (469.94) 12. Lets assume that at age 62 you have saved the amount in problem 13. You think you will live to be 88 years old. During retirement, you plan to earn 8% on your investments. How much can you withdraw every month for the remainder of your life? Future Value (FV) Present Value (PV) Annual Interest Rate (I/Y) Time in Years (N) Solve for PV -$3,850,000.00 8.00% 26.00 Compounding Freq. (m) (P/Y) Solve for FV $30,605,216.75 FV (Continuous Compounding) $30,817,205.32 Solve for Interest Rate 12 Solve for Time Is this an Ordinary Annuity (y/n) Payment (PMT) (A) Growth of an Annuity Growth of a Perpetuity y Effective Interest Rate PVA PMT for PVA 8.300% $ 29,360.03 13. You win a prestigious sweepstake award. The company offers you $50,000 per year for the next 30 years or a lump sum. Answer the following questions. a. If the company can invest at 7%, how much would they need to invest to pay the promised cash flow stream? This is the amount of the lump sum offer? Future Value (FV) Present Value (PV) Annual Interest Rate (I/Y) Time in Years (N) 7.00% 30.00 Compounding Freq. (m) (P/Y) Solve for PV $0.00 Solve for FV FV (Continuous Compounding) Solve for Interest Rate $0.00 $0.00 1 Solve for Time Is this an Ordinary Annuity (y/n) Payment (PMT) (A) Growth of an Annuity Growth of a Perpetuity y $50,000.00 Effective Interest Rate PVA 7.000% $ (620,452.06) b. If you could invest at 9%, how much could you withdraw for the 30 years, if you invest the lump sum? Future Value (FV) Present Value (PV) Annual Interest Rate (I/Y) Time in Years (N) Solve for PV -$620,452.00 9.00% 30.00 Compounding Freq. (m) (P/Y) Solve for FV $8,231,957.64 FV (Continuous Compounding) $9,232,159.31 Solve for Interest Rate 1 Solve for Time Is this an Ordinary Annuity (y/n) Payment (PMT) (A) Growth of an Annuity Growth of a Perpetuity y Effective Interest Rate PVA PMT for PVA 9.000% $ 60,392.53 14. At retirement you want to receive $60,000 per year for 25 years and can earn 13%. How much must you invest to achieve this goal? a. If you are concerned about the 3.75% inflation rate, how much must you invest? Future Value (FV) Present Value (PV) Annual Interest Rate (I/Y) Time in Years (N) Compounding Freq. (m) (P/Y) 13.00% 25.00 Solve for PV $0.00 Solve for FV FV (Continuous Compounding) Solve for Interest Rate $0.00 $0.00 1 Solve for Time Is this an Ordinary Annuity (y/n) Payment (PMT) (A) Growth of an Annuity Growth of a Perpetuity y $60,000.00 3.75% Effective Interest Rate 13.000% PVA $ (439,799.10) PMT for PVA Interest for PVA (per period) #NUM! FVA PMT for FVA Interest for FVA PV of Perpetuity $ (461,538.46) PV of Growing Annuity $ (571,956.47) PV of Growing Perpetuity $ (461,538.46) 15. If you wanted to receive $10,000 per year forever, how much would you need to invest at 12%? Future Value (FV) Present Value (PV) Annual Interest Rate (I/Y) Time in Years (N) Compounding Freq. (m) (P/Y) 12.00% Solve for PV $0.00 Solve for FV FV (Continuous Compounding) Solve for Interest Rate $0.00 $0.00 1 Solve for Time Is this an Ordinary Annuity (y/n) Payment (PMT) (A) Growth of an Annuity Growth of a Perpetuity y $10,000.00 Effective Interest Rate #DIV/0! 12.000% PVA $ PMT for PVA Interest for PVA (per period) #NUM! FVA PMT for FVA Interest for FVA #VALUE! PV of Perpetuity $ (83,333.33) a. What kind of cash flow stream is this? perpetuity 16. A company is planning a project that will provide the following cash flow stream. If they can earn 14% on average, what is the value of this project? Pds 1 80,000 2 70,000 3 70,000 4 50,000 5 50,000 6 60,000 7 75,000 Cash Flow 0 1 2 3 4 5 6 7 8 9 10 11 $80,000 $70,000 $70,000 $50,000 $50,000 $60,000 $75,000 Discount Rate 14.00% Number of Periods PV of Future Cash Flows Net Present Value IRR FV of Cash Flows 7 $284,166.61 $284,167 #NUM! $711,061.24 17. If the company could reinvest the above cash flow stream at 14%, what would they have at the end of the 7th year? 18. How do you change the compounding frequency in a time value problem? M = P/Y periods per year 19. What is the Effective interest rate for a 12%, monthly compounded investment? Quarterly? Future Value (FV) Present Value (PV) Annual Interest Rate (I/Y) Time in Years (N) 12.00% Compounding Freq. (m) (P/Y) Solve for PV $0.00 Solve for FV FV (Continuous Compounding) Solve for Interest Rate $0.00 $0.00 12 Solve for Time Is this an Ordinary Annuity (y/n) Payment (PMT) (A) y $10,000.00 #DIV/0! Effective Interest Rate 12.683% 20. A newly married couple is considering buying a new home. The house of their dreams costs $325,000. They have 10% to put down on the home and can borrow at 3.95%. What are the monthly payments on a 30 year mortgage? a. How much interest is paid out of the first month’s payment? Loan Amount $292,500.00 Pmt per Period $1,388.02 Loan Maturity (yrs) 30 Total AMT Paid $499,687.71 PMT per Year (P/Y) m 12 Total Financing Costs $207,187.71 Annual Interest Rate 3.95% b. When the couple pays their 180th payment, what is the balance? Period 0 1 2 178 179 180 181 182 PMT Interest PMT $1,388.02 $1,388.02 $1,388.02 $1,388.02 $1,388.02 $1,388.02 $1,388.02 $962.81 $961.41 $627.31 $624.81 $622.30 $619.78 $617.25 Principal Reduction $425.21 $426.61 $760.71 $763.21 $765.72 $768.24 $770.77 Remaining Balance $292,500.00 $292,074.79 $291,648.18 $189,815.70 $189,052.49 $188,286.76 $187,518.52 $186,747.75 c. If they paid an extra 50 per month, how much interest would they save? Loan Amount $292,500.00 Pmt per Period $1,388.02 Loan Maturity (yrs) 30 Total AMT Paid $499,687.71 PMT per Year (P/Y) m 12 Total Financing Costs $207,187.71 Impact of Accelerated PMTS Years of Loan Total AMT Paid Interest Saved 28.08 $484,525.24 $15,162.47 Annual Interest Rate Extra Periodic PMT Biweekly impact =PMT/12 3.95% $50.00 d. If they paid biweekly payments, how much would they save? (divide monthly payments by 12) Loan Amount $292,500.00 Pmt per Period $1,388.02 Loan Maturity (yrs) 30 Total AMT Paid $499,687.71 PMT per Year (P/Y) m 12 Total Financing Costs $207,187.71 Impact of Accelerated PMTS Years of Loan Total AMT Paid Interest Saved 25.93 $467,856.90 $31,830.81 Annual Interest Rate Extra Periodic PMT Biweekly impact =PMT/12 3.95% $115.67 21. What is a loan amortization table? Segments annuity payment s into principal and interest components Why is this important 22. When I was born my Grandfather purchased a stock for $25. When I was 25 the stock was worth $75. What did I earn on the investment? Future Value (FV) Present Value (PV) Annual Interest Rate (I/Y) Time in Years (N) $75.00 -$25.00 25.00 Compounding Freq. (m) (P/Y) Solve for PV Solve for FV FV (Continuous Compounding) Solve for Interest Rate $25.00 4.49% 1 Solve for Time Is this an Ordinary Annuity (y/n) Payment (PMT) (A) y Effective Interest Rate 4.492% 23. What did I earn at age 65 when the stock was worth $250? Future Value (FV) Present Value (PV) Annual Interest Rate (I/Y) Time in Years (N) $250.00 -$25.00 65.00 Compounding Freq. (m) (P/Y) Solve for PV Solve for FV FV (Continuous Compounding) Solve for Interest Rate $25.00 3.61% 1 Solve for Time Is this an Ordinary Annuity (y/n) Payment (PMT) (A) y Effective Interest Rate 3.606% 24. Describe the rule of 72. Setup the following table: 0 6 12 18 24 30 36 42 48 3% 2,000 6% 2,000 4,000 4,000 8,000 16,000 8,000 32,000 Do one column at a time 12% 2,000 4,000 8,000 16,000 32,000 64,000 128,000 256,000 512,000 Discuss how doubling Interest rate does not double the amount How long will it take for your money to double in a savings account? Time http://www.youtube.com/watch?feature=player_detailpage&v=_zpGZfFbW4M Retirement example You currently earn $50,000 and have been able to save $15,000 in a retirement account. You expect to retire in 35 years at age 60. Inflation is expected to be at 3% for the foreseeable future. (age 30) 1) What will you need to receive as income in year one of retirement to maintain your current lifestyle? FV PV I/Y N M PMT -50000 3 25 1 Future Value (FV) Present Value (PV) Annual Interest Rate (I/Y) Time in Years (N) Compounding Freq. (m) (P/Y) Solve for PV -$50,000.00 3.00% 35.00 Solve for FV $140,693.12 FV (Continuous Compounding)$142,882.56 Solve for Interest Rate 1 2) If you live to be 90, how much do you need to accumulate to pay the cashflow in question 1, if you can earn 8% during retirement? FV PV I/Y N M PMT 8 30 1 140693 Annual Interest Rate (I/Y) Time in Years (N) Compounding Freq. (m) (P/Y) 8.00% 30.00 Solve for FV FV (Continuous Compounding) Solve for Interest Rate $0.00 $0.00 1 Solve for Time Is this an Ordinary Annuity (y/n) Payment (PMT) (A) Growth of an Annuity Growth of a Perpetuity y $140,693.00 Effective Interest Rate PVA 8.000% $ (1,583,891.31) 3) If you want your retirement income to keep up with inflation, how much do you need to accumulate? FV PV I/Y N M PMT G 8 30 1 140,693 3 Annual Interest Rate (I/Y) Time in Years (N) Compounding Freq. (m) (P/Y) 8.00% 30.00 Solve for FV FV (Continuous Compounding) Solve for Interest Rate $0.00 $0.00 1 Solve for Time Is this an Ordinary Annuity (y/n) Payment (PMT) (A) Growth of an Annuity Growth of a Perpetuity y $140,693.00 3.00% Effective Interest Rate PVA $ PMT for PVA PV of Growing Annuity $ 8.000% (1,583,891.31) (2,135,115.13) 4) How much must you invest each month in your retirement plan to get the amount needed for retirement, if you can earn 12% on your invested dollars? FV PV I/Y N M PMT 2,135,115 -15,000 12 35 12 Future Value (FV) Present Value (PV) Annual Interest Rate (I/Y) Time in Years (N) $2,135,115.00 -$15,000.00 12.00% 35.00 Compounding Freq. (m) (P/Y) Solve for PV Solve for FV FV (Continuous Compounding) $1,000,294.97 Solve for Interest Rate 12 Solve for Time Is this an Ordinary Annuity (y/n) Payment (PMT) (A) Growth of an Annuity Growth of a Perpetuity y Effective Interest Rate PVA PMT for PVA 12.683% $ (179.67) 5) If you are investing a certain amount today, what return do you need to receive to get the desired amount? FV PV I/Y N M PMT 2,135,115 -15,000 35 12 -150 Future Value (FV) Present Value (PV) Annual Interest Rate (I/Y) Time in Years (N) $2,135,115.00 -$15,000.00 35.00 Compounding Freq. (m) (P/Y) Solve for PV Solve for FV FV (Continuous Compounding) $15,000.00 Solve for Interest Rate 14.25% 12 Solve for Time Is this an Ordinary Annuity (y/n) Payment (PMT) (A) Growth of an Annuity Growth of a Perpetuity y -$150.00 Effective Interest Rate PVA PMT for PVA Interest for PVA (per period) 15.219% 12.30% Offline Homework (25 points) ______ BUA321 CH05 Homework 25 points 1) If you invested 12,000 today in a mutual fund that is expected to provide an annually compounded average return of 13% over the next 7 years, how much will you have in your account at the end of the 7th year? 28,231 Future Value (FV) Present Value (PV) Annual Interest Rate (I/Y) Time in Years (N) Solve for PV -$12,000.00 13.00% 7.00 Solve for FV $28,231.27 FV (Continuous Compounding) $29,811.87 Solve for Interest Rate What if the investment compounded interest monthly? $29,666 2) Your company wants to buy a piece of equipment that will cost 500,000 in 12 years. If you can invest your company’s money at an average return of 10%, how much do you need to invest in a lump sum today to pay cash for the asset? 159,315 Future Value (FV) Present Value (PV) Annual Interest Rate (I/Y) Time in Years (N) $500,000.00 10.00% 12.00 Solve for PV -$159,315.41 Solve for FV FV (Continuous Compounding) $0.00 What would the monthly investment requirement be? 1,808 Future Value (FV) Present Value (PV) Annual Interest Rate (I/Y) Time in Years (N) $500,000.00 10.00% 12.00 Compounding Freq. (m) (P/Y) Solve for PV -$151,347.80 Solve for FV FV (Continuous Compounding) Solve for Interest Rate $0.00 12 Solve for Time Is this an Ordinary Annuity (y/n) Payment (PMT) (A) Growth of an Annuity Growth of a Perpetuity y Effective Interest Rate PVA PMT for PVA 10.471% $ (1,808.72) 3) I have just won the LOTTO. The jackpot was 20 million dollars. The state has offered me one million dollars per year for 20 years (ignore taxes) or a lump sum. The lump sum is the present value of the payments. How much must the state invest today (the lump sum amount) to payout the annuity, if they can invest at the T-Bond rate of 6%? (ignore taxes) 11,469,921 Future Value (FV) Present Value (PV) Annual Interest Rate (I/Y) Time in Years (N) 6.00% 20.00 Compounding Freq. (m) (P/Y) Solve for PV $0.00 Solve for FV FV (Continuous Compounding) Solve for Interest Rate $0.00 $0.00 1 Solve for Time Is this an Ordinary Annuity (y/n) Payment (PMT) (A) Growth of an Annuity Growth of a Perpetuity y $1,000,000.00 Effective Interest Rate PVA 6.000% $ (11,469,921.22) If I can invest at an average of 12%, how much can I withdraw from the lump sum per year over the 20 year window? 1,535,579 Future Value (FV) Present Value (PV) Annual Interest Rate (I/Y) Time in Years (N) Solve for PV -$11,469,921.00 12.00% 20.00 Compounding Freq. (m) (P/Y) Solve for FV $110,642,219.72 FV (Continuous Compounding) $126,434,962.26 Solve for Interest Rate 1 Solve for Time Is this an Ordinary Annuity (y/n) Payment (PMT) (A) Growth of an Annuity Growth of a Perpetuity y Effective Interest Rate PVA PMT for PVA Should I take the lump sum or the 1 million dollar annuity? 12.000% $ 1,535,579.03 WHY? 4) Our company is considering a project that will provide the following after tax cash flows to the firm: CF1 90,000 CF2 125,000 CF3 175,000 CF4 200,000 CF5 190,000 CF6 – 9 165,000 CF10 145,000 If we have a required return of 14% for this project, what is the value of the project to the company? 799152 Pds Cash Flow 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 $90,000 $125,000 $175,000 $200,000 $190,000 $165,000 $165,000 $165,000 $165,000 $145,000 Discount Rate 14.00% Number of Periods PV of Future Cash Flows Net Present Value 10 $799,152.77 $799,153 IRR #NUM! FV of Cash Flows $2,962,636.19 If we had to pay 700,000 for the project today, should we purchase the project? yes 5) When you retire you will initially require an annual income of 125,000 per year. You anticipate living for 25 years during retirement with an 8% investment return. How much do you need in your pension plans to cover this need? 1334347 Future Value (FV) Present Value (PV) Annual Interest Rate (I/Y) Time in Years (N) 8.00% 25.00 Compounding Freq. (m) (P/Y) Solve for PV $0.00 Solve for FV FV (Continuous Compounding) Solve for Interest Rate $0.00 $0.00 1 Solve for Time Is this an Ordinary Annuity (y/n) Payment (PMT) (A) Growth of an Annuity Growth of a Perpetuity y $125,000.00 Effective Interest Rate PVA 8.000% $ (1,334,347.02) How much will you have to invest monthly over the next 35 years to acquire that amount of money, if you can earn 13% on your investments? 593.81 Future Value (FV) Present Value (PV) Annual Interest Rate (I/Y) Time in Years (N) $1,334,347.00 Solve for PV 13.00% 25.00 Compounding Freq. (m) (P/Y) Solve for FV FV (Continuous Compounding) Solve for Interest Rate -$52,650.48 $0.00 12 Solve for Time Is this an Ordinary Annuity (y/n) Payment (PMT) (A) Growth of an Annuity Growth of a Perpetuity y Effective Interest Rate 13.803% PVA PMT for PVA $ (593.81) Interest for PVA (per period) #NUM! FVA PMT for FVA $ (593.81) 6) I want to purchase a house in Florida. The current value is $350,000. I would like to put 25% down and make the purchase in 5 years. Houses in the area are appreciating at 6% per year. The forecasted mortgage rate at the time of purchase is 7.5% for 30 years. Future cost of the house? 468378 Future Value (FV) Present Value (PV) Annual Interest Rate (I/Y) Time in Years (N) Solve for PV $350,000.00 6.00% 5.00 Solve for FV -$468,378.95 FV (Continuous Compounding)-$472,450.58 Solve for Interest Rate Down payment? 117,094 Mortgage amount? 351,284 Monthly payments to get down payment, if I can invest at 15%? 17366 Future Value (FV) Present Value (PV) Annual Interest Rate (I/Y) Time in Years (N) $117,094.00 15.00% 5.00 Compounding Freq. (m) (P/Y) Solve for PV -$58,216.41 Solve for FV FV (Continuous Compounding) Solve for Interest Rate $0.00 1 Solve for Time Is this an Ordinary Annuity (y/n) Payment (PMT) (A) Growth of an Annuity Growth of a Perpetuity y Effective Interest Rate 15.000% PVA PMT for PVA $ (17,366.86) Interest for PVA (per period) #NUM! FVA PMT for FVA $ (17,366.86) Monthly payment of the mortgage? 2456 Loan Amount $351,284.00 Pmt per Period $2,456.23 Loan Maturity (yrs) 30 Total AMT Paid $884,242.33 PMT per Year (P/Y) m 12 Total Financing Costs $532,958.33 Annual Interest Rate 7.50% Copy and Paste Special the first 6 months of the amortization table from the worksheet. What is the reduction in principal in month 1? (3) Period PMT 0 1 2 3 4 5 6 Interest PMT $2,456.23 $2,456.23 $2,456.23 $2,456.23 $2,456.23 $2,456.23 $2,195.53 $2,193.90 $2,192.26 $2,190.61 $2,188.95 $2,187.28 Principal Reduction $260.70 $262.33 $263.97 $265.62 $267.28 $268.95 Remaining Balance $351,284.00 $351,023.30 $350,760.96 $350,496.99 $350,231.37 $349,964.09 $349,695.13 If you made an additional payment per year (1/12 more per month or made biweekly pmts), How much interest would you save? 139614 Loan Amount $351,284.00 Pmt per Period $2,456.23 Loan Maturity (yrs) 30 Total AMT Paid $884,242.33 PMT per Year (P/Y) m 12 Total Financing Costs $532,958.33 Impact of Accelerated PMTS Years of Loan Total AMT Paid Interest Saved 23.32 $744,627.54 $139,614.79 Annual Interest Rate Extra Periodic PMT Biweekly impact =PMT/12 7.50% $204.69
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