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Two numeric facts [May. 4th, 2014|12:22 am]
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!

[User Picture]From: dendren
2014-05-05 02:42 pm (UTC)
ugh... interest math always makes my brain hurt.
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[User Picture]From: snowninja7
2014-05-05 07:04 pm (UTC)
And (but?) shifting payments around to finally kill off an individual loan can feel amazing, even though it's no different $-wise than paying down evenly.
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[User Picture]From: dr_tectonic
2014-05-05 07:19 pm (UTC)
Well, and on top of that, even if it's no different in terms of how much total you pay in the long run, if it eliminates one of the bills you have to pay each month, that can make a pretty big difference to the overall financial situation.

So yeah, definitely gonna focus on paying off one of the two student loans first, rather than spreading it out evenly.
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[User Picture]From: drdeleto
2014-05-08 01:27 pm (UTC)
Which park-n-ride is it? And does the bus take you all the way to work?
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[User Picture]From: dr_tectonic
2014-05-08 01:58 pm (UTC)
It's Westminster Center, the one at 92nd and Sheridan. The BV (or the AB) takes me from there to Table Mesa PnR in Boulder, where I can catch the shuttle van that runs between work's various campuses in Boulder.
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