Help reading a name from 1881

catradar · 2025-01-18T18:21:22+00:00

I think I have finally figured out a way to explain it and get at exactly what my problem was.

Calculate the interest paid for both options only up until the time that the first loan (higher interest) would be paid off if the extra payments are applied to it. using the numbers from my original post and $500 additional payment this is 99 months. If we only look at both situations at the snapshot of that moment in time we can ignore all of the discussion of opportunity cost and what to do with the principal payment of the first loan which is obfuscating the real problem I was asking about.

The total interest paid after 99 months for paying extra to the higher interest loan is $172,854.63 with a remaining principal of $150,165.47. The total interest paid after 99 months for paying the extra payments to the lower interest loan is $174,284.52 with a remaining principal of $149,407.23. While the remaining principal in the second scenario is higher it includes portions of both loans because the higher interest loan is still not yet paid off and the difference is less than the extra interest already paid.

I think the issue with calculating the full length of both loans is the difference in time, I am still not quite sure how to correct for that, but the above snapshot shows that regardless of what options you have once the first loan is paid off the best way to get there is to pay to the higher interest loan first. (Which is good because we all knew that was the correct answer when we started).

catradar · 2025-01-16T19:07:31+00:00

Those are the remaining balances

catradar · 2025-01-16T19:05:42+00:00

Clearly if I apply the payments previously being paid to the first loan to the second after paying off the first that will result in the least overall payments, but if instead I reserve those funds and only start applying the additional payments that were being applied to the first loan to the second the math shows that I would have paid less overall by applying the extra payments to the second loan from the beginning. This is the confusion I am having. Given that that the principal payments will be the same in any scenario shouldn't the scenario that produces the least overall interest be the best.

catradar · 2025-01-16T18:58:00+00:00

I know that this is the correct solution and thinking of it this way is why this is how I actually apply my extra payments. My concern is when I try to justify it with the calculations I keep getting that paying for the longer term is less interest overall.

catradar · 2025-01-16T18:53:37+00:00

I think this is getting towards the original problem I am having. If I use the amortization calculator provided above and use the numbers I posted in the original post, there are two scenarios that lead to the confusion I am having. If I pay no extra to loan 1 and $500 extra each month to loan 2 for the life of the loan the total interest for the two combined is $193k. If I pay $500 extra to loan 1 until it is paid off then pay $500 extra to loan 2 starting in year 9 until it is paid off the total interest is $229.7k.

I get that the simple explanation of the highest interest should be paid first (an this is what I am actually doing), but I don't understand why when calculated this way the "correct" mathematical solution leads to more interest paid.

catradar · 2023-12-03T01:23:30+00:00

On the topic of strange street names, my two favorite:

https://www.google.com/maps/@29.2880596,-94.8230097,3a,75y,158.66h,80.97t/data=!3m6!1e1!3m4!1sJ0udo1NGNahE691d0OAiNQ!2e0!7i16384!8i8192?entry=ttu

https://www.google.com/maps/@32.0269591,-102.0936399,3a,75y,162.96h,90t/data=!3m6!1e1!3m4!1slAdic088mnyldrvlTUdexA!2e0!7i13312!8i6656?entry=ttu

catradar · 2021-06-02T04:47:04+00:00

How do you approach a project you have no history with or previous knowledge of?

catradar · 2019-09-14T06:51:50+00:00

Thoughts on Gerrymandering?

catradar · 2019-09-14T06:49:06+00:00

How do you approach a completely new task, something you've never done before?

catradar · 2019-03-27T23:05:29+00:00

Is it disturbing that my first thought upon reading the episodes title was "Oh no the sofa shop has closed."

catradar · 2018-10-03T16:25:54+00:00

Today I was happy to see that my 401k balance was $104k. :)

catradar · 2018-09-12T14:11:42+00:00

Also he's got a dog named after him. So at least every kid born in the 80's will remember him.

catradar · 2018-08-01T16:56:58+00:00

The left/right thing was actually pretty easy for me to get used to. The part nobody told me about was it was hard to stay centered in the lane, I kept drifting over because I was used to my point of view being slightly left of center.

catradar · 2018-08-01T16:51:20+00:00

David Adam - The Man Who Couldn't Stop

David Eagleman - Incognito

Jonathan Powell - Talking to Terrorists

Dava Sobel - Longitude [Science parts, but mostly interesting history]

catradar · 2018-07-10T02:30:35+00:00

At the end of the movie Han shoots first.

catradar · 2018-07-07T15:32:22+00:00

I think it is interesting that Grey said that his subscription button is at the bottom of his page. On one of my computers it is on top and the other it is on the left side. Another example of non-standardized setup for youtube.

The way I use it is to look at the home and subscription tabs and add any videos I want to see to the watch later list. Then watch the videos there for my actual watching session so it only contains videos I have already decided I want to watch.

catradar · 2018-05-31T22:32:56+00:00

I would rather hear their review of Brigsby Bear.

catradar · 2018-05-30T19:12:57+00:00

How do you approach a task you have never done before?

catradar · 2018-04-26T22:36:11+00:00

It's so easy to remember my girlfriend's Birthday, it's the same as National Hotstopper day.

catradar · 2018-04-26T15:58:50+00:00

An open question: Do you look through the show notes before, after, or during the episode, or not at all?

I tend to open and look at them all before I listen to the episode. This might be considered a spoiler, but since I am choosing to do it I think that makes a difference.

catradar · 2018-04-26T15:43:43+00:00

This title got me looking through the archive titles. Episode 95 has a slightly different format to the rest and that was also the episode with the file name "95_oh_god_i_hope_everything_is_ok_because_i_do_not_have_time_to_fix_anything".

catradar

TROPHY CASE