May 4th, 2014

Dream of Bingo

Two numeric facts

Two numeric facts from today:

1) It is 2.75 miles from my house to the park-n-ride, and it takes me 55 minutes to walk there. Therefore, my walking speed is just about 3 mph exactly.

55 minutes each way is a bit much, even for the sake of exercise, so I'm not likely to change my commute, but I may walk it one-way from time to time on days I can get Jerry to come pick me up on the trip home.

2) If you have multiple loans at the same interest rate and you're paying steadily on them each month, it doesn't matter how you divide up your payments. As long as you're not letting interest accrue, you can split whatever's left over to pay down the principal however you like and it all comes out the same in the end.

This is obvious to me now, but (somewhat embarrassingly) I couldn't feel sure about it until I proved it to myself with a quick spreadsheet simulation. But think about it. If the interest rate is constant, then each dollar behaves the same, no matter how many of them are bundled together into a loan. Any particular dollar generates the same amount of interest as any other until you pay it off, and then it goes away. Whether you've got one loan for $50,000 dollars, or five loans for $10,000, or even 10,000 loans of five dollars each, it all adds up the same.

Hooray for fungibility!