RatedrillPayoff time with extra payments
A time value of money problem from Ratedrill. Solve it with one answer box, with fresh numbers on every attempt and the formula, calculator keystrokes and Excel version in the worked answer, and it is checked the moment you submit.
The task
A $150,000, 30-year mortgage at 4.25% APR has a required payment of $737.91 a month. If you pay $800 extra every month from the start, how many months until the loan is paid off? Give N to 2 decimals.
What this problem teaches
That is about 10 years instead of 30.
A hint if you get stuck
Solve for N with the bigger payment (required + extra), the same loan amount and the same monthly rate.
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