It is an unfortunate fact that I am quite far from adept at all things related to mathematics. It is for that reason that I could use your assistance concerning the following question:
According to this web page, http://www.mortgagecalculatorsplus....al-payment-each-year-change-your-mortgage.php if one were to have a mortgage of 200,000 at a 6.5 percent interest for a 30 year term, the owner of the home would pay $1264.00 on a monthly basis. If one additional payment of $1264.00 were to be made annually, the above source states that one would save nearly 56 thousand in interest, which in turn would reduce the overall amount paid on the loan by the same amount as a result, however, in order to see how they came to this conclusion I took the 1264 x 30, which equals 37,920, then I assumed one would have to factor in the compounded interest on that sum, which equates to about 9,000 whether I compound the 1264 payment annually or monthly (unless I am doing something incorrectly, which is highly likely); those two figures combined result in a total of about 46K in savings, not 56K.
I thought perhaps I had to factor in the interest that would have been paid on the savings that one would have to pay had they not submitted the extra payment each year, but I believe that interest was accounted for when I allotted a 6.5 interest rate on the 1264 payment over the course of a thirty year duration.
Suffice it to say my strengths reside very far outside of the realm of mathematics, so if anyone would be so kind as to explain how they arrived at a 56K savings for one extra annual payment of 1264 over the course of a thirty year duration I would be most appreciative.
According to this web page, http://www.mortgagecalculatorsplus....al-payment-each-year-change-your-mortgage.php if one were to have a mortgage of 200,000 at a 6.5 percent interest for a 30 year term, the owner of the home would pay $1264.00 on a monthly basis. If one additional payment of $1264.00 were to be made annually, the above source states that one would save nearly 56 thousand in interest, which in turn would reduce the overall amount paid on the loan by the same amount as a result, however, in order to see how they came to this conclusion I took the 1264 x 30, which equals 37,920, then I assumed one would have to factor in the compounded interest on that sum, which equates to about 9,000 whether I compound the 1264 payment annually or monthly (unless I am doing something incorrectly, which is highly likely); those two figures combined result in a total of about 46K in savings, not 56K.
I thought perhaps I had to factor in the interest that would have been paid on the savings that one would have to pay had they not submitted the extra payment each year, but I believe that interest was accounted for when I allotted a 6.5 interest rate on the 1264 payment over the course of a thirty year duration.
Suffice it to say my strengths reside very far outside of the realm of mathematics, so if anyone would be so kind as to explain how they arrived at a 56K savings for one extra annual payment of 1264 over the course of a thirty year duration I would be most appreciative.
