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Gloria has a $125,000 home financed with a 30-year loan at 6%. If she wished to pay one extra monthly payment each year, how many months will t take her to pay off her mortgage?

1 Answer

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Answer:

295 months

Explanation:

You want to know the number of months required to pay off a 30-year loan of $125000 at 6% if an extra payment is made each year.

Number of payments

The number of payments required will depend on the actual payment schedule, and the way the lender computes interest due.

The attached calculation shows it takes 319 payments. The assumption is that they are evenly spaced at 13 payments per year (one every 4 weeks), and the interest is computed on the interval between payments.

Number of months

If 13 payments are made per year, the number of years it takes to pay off the loan will be ...

319/13 = 24 7/13

24 years and 7 months is 295 months.

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Additional comment

If the first payment is made on Jan 28, and payments are made every 4 weeks, there will be 2 payments in Dec. That is, except for the last month of the year, there will be 1 payment per month.

If regular monthly payments are made, but one of the payments is doubled, the result may be different.

Gloria has a $125,000 home financed with a 30-year loan at 6%. If she wished to pay-example-1
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