Calculating your remaining balance and other things...

[jkuchta]

I don't think the above formula is correct as it doesen't take into account the fact that the interest owed (and therefore included in your monthly payment) is calculated more than once a year. As you make payments, you reduce the principle amount that you owe. The interest you pay is based on the principle that you owe. As you make payments, the amount of that payment that gets applied to interest goes down

i.e. a lot of the money you pay in your first few payments goes to interest, whereas the bulk of the money you pay towards the end of your loan term goes to pay off principle, as the principle is small, so the accrued interest is small.

If I were any good at math, I'd figure out the formula.

[tetzyamis]

Originally Posted by jkuchta

I don't think the above formula is correct as it doesen't take into account the fact that the interest owed (and therefore included in your monthly payment) is calculated more than once a year. As you make payments, you reduce the principle amount that you owe. The interest you pay is based on the principle that you owe. As you make payments, the amount of that payment that gets applied to interest goes down

i.e. a lot of the money you pay in your first few payments goes to interest, whereas the bulk of the money you pay towards the end of your loan term goes to pay off principle, as the principle is small, so the accrued interest is small.

If I were any good at math, I'd figure out the formula.

Below is how it will be monthly for 5 years under my calculation using the amount OP posted.
It's only $6.08 off in 60 months, so it's pretty accurate, so I don't think it's wrong.

Month Amount Owed Interest Paid for that month
Dec-08 12,530.33 173.55
Jan-09 12,356.78 174.72
Feb-09 12,182.06 175.90
Mar-09 12,006.16 177.10
Apr-09 11,829.06 178.30
May-09 11,650.77 179.50
Jun-09 11,471.26 180.72
Jul-09 11,290.54 181.94
Aug-09 11,108.60 183.18
Sep-09 10,925.42 184.42
Oct-09 10,741.00 185.67
Nov-09 10,555.33 186.93
Dec-09 10,368.41 188.19
Jan-10 10,180.22 189.47
Feb-10 9,990.75 190.75
Mar-10 9,800.00 192.04
Apr-10 9,607.95 193.34
May-10 9,414.61 194.65
Jun-10 9,219.95 195.97
Jul-10 9,023.98 197.30
Aug-10 8,826.68 198.64
Sep-10 8,628.04 199.98
Oct-10 8,428.06 201.34
Nov-10 8,226.72 202.70
Dec-10 8,024.02 204.08
Jan-11 7,819.94 205.46
Feb-11 7,614.48 206.85
Mar-11 7,407.63 208.25
Apr-11 7,199.38 209.66
May-11 6,989.72 211.08
Jun-11 6,778.64 212.51
Jul-11 6,566.12 213.95
Aug-11 6,352.17 215.40
Sep-11 6,136.77 216.86
Oct-11 5,919.90 218.33
Nov-11 5,701.57 219.81
Dec-11 5,481.76 221.30
Jan-12 5,260.46 222.80
Feb-12 5,037.66 224.31
Mar-12 4,813.36 225.83
Apr-12 4,587.53 227.36
May-12 4,360.17 228.90
Jun-12 4,131.27 230.45
Jul-12 3,900.82 232.01
Aug-12 3,668.81 233.58
Sep-12 3,435.23 235.17
Oct-12 3,200.06 236.76
Nov-12 2,963.30 238.36
Dec-12 2,724.94 239.98
Jan-13 2,484.96 241.60
Feb-13 2,243.36 243.24
Mar-13 2,000.12 244.89
Apr-13 1,755.23 246.55
May-13 1,508.68 248.22
Jun-13 1,260.47 249.90
Jul-13 1,010.57 251.59
Aug-13 758.98 253.30
Sep-13 505.68 255.01
Oct-13 250.67 256.74
Nov-13 -6.08 258.48

[tetzyamis]

I don't know if this attachment to a thread works (first time trying).
But it's the Excel spreadsheet with that calculation.
You could add additional payment in "Add" column to play around and see how much extra payment can reduce the amount you owe.

Edit: I guess attachment doesn't work... I can email you the spreadsheet if you PM me your email address.