Question

Only using excel!

Dobby buys himself a home in Scappoose for $134,000 and puts $12000.  He finances the rest at 5.6% for 30 years through Gringotts bank.  

He pays an extra $200 a month for the life of the loan, how much does he save?  

Answer 1

	Using PMT function we get the monthly installment to be made
	Value of house		134000
	Less : Amount invested by Dobby		-12000
	Loan Amount		122000
	Monthly Rate (5.6/12)	0.466667
	No of payments (30*12)	360
	($700.38)
	So the monthly payment to be done by Dobby would be $ 700.38 which includes interest and principal
Total Payment	(700.38*360)	252136.8
Less : Loan Taken		-122000
Interest on loan		130136.8
	In this case, Dobby would be paying $ 130136.80 in interest
If extra $ 200 is paid by Dobby, then the interest payment would be $ 71496.51
Hence Dobby would save (130136.80-71496.51)		58730.29	$58,730.29