amount of interest paid for the life of the loan
As shown in Table 1, the total payment decreases from $1,200 ($500 principal and $700 interest) in year one to $535 ($500 principal and $35 interest) in year 20. The total amount paid over the 20 year period is $17,350 which consists of the $10,000 loan plus $7,350 of interest. Effect of the Amount of Your Income on the Amount of Your Deduction. The amount of your student loan interest deduction is phased out (gradually reduced) if your MAGI is between $65,000 and $80,000 ($130,000 and $160,000 if you file a joint return). You can't claim a student loan interest deduction if your MAGI is $80,000 or more ($160,000 or more if you file a joint return). Fill separate boxes with the amount of the loan, the length you have to pay, and the interest, and Excel can calculate your monthly payments for you. For the remainder of the section, you can use the following example loan: You take out a $100,000 home loan. You have 30 years to pay it off at 4.5% annual interest rate. Find your total interest on the loan. The amortization schedule calculates total interest owed of $1932.48 over the life of the loan. If you want to reduce the total interest, you can choose another loan structure with a shorter term, maybe 3 years. You can also make larger monthly payments. Typically you take the balance of the loan and multiply it by the interest rate (2370.28*.03). The number you get is the amount of interest accrued over the course of a year ($71.1084), you would then divide by 365 to get a daily interest amount ($0.1948) and multiply by the number of days since your last payment. To figure out the total amount you will pay over the life of your loan, all you have to do is multiply the payment amount by the total number of payments. In the example, you'd multiply $506.69 by 360 to get $182,408. This is the total amount you'll pay over the loan's term. Maximum monthly payment.:$1200.00. Annual interest rate:7.50%. Total Interest on your Loan. Using the minimum payment you'll pay $444.88($31.78 average per month) in total interest. Using the maximum payment you'll pay $302.79($ average per month) in total interest. Now try increasing your monthly payment on your loan by $50. You will be amazed at the results. For a $95,000 loan at 7.0% if you pay $700/month, it takes you 22.5 years to pay off the loan, and you pay $93,780.03 in interest over the life time of the loan. For the same loan, if you pay $750 a month, the loan is paid off in 19.25 years , and the total interest is reduced to $78,146.45. Now that you have the monthly payment, you can determine how much interest you will pay over the life of the loan. Multiply the number of payments over the life of the loan by your monthly payment. Then subtract the principal amount you borrowed. Using the example above, you'd multiply $506.69 by 360 and get $182,408. To determine the amount of interest that could be deducted on the loan for 2016, Peg starts with the total amount of stated interest she paid, $87.89. Next, she allocates the loan origination fee over the term of the loan ($300 ÷ 60 months = $5 per month).
$1932.48