Understanding Loan Payments and Early Payoff

The video tutorial explains how to calculate the early payoff of a 30-year loan with a 7.5% APR using the TVM Solver. It starts by setting up the loan details, including the loan amount, interest rate, and payment terms. The tutorial then demonstrates how to adjust the monthly payment to $3,200 and solve for the number of months required to pay off the loan early. By increasing the monthly payment, the loan is paid off in 244 months instead of 360, saving 116 months or 9 years and 8 months.

What is the original loan amount mentioned in the scenario?

• $600,000

• $500,000

• $400,000

• $300,000

How many years is the loan term originally set for?

• 25 years

• 15 years

• 20 years

• 30 years

What is the interest rate used in the TVM Solver setup?

• 5.5%

• 6.5%

• 8.5%

• 7.5%

What is the new monthly payment amount to pay off the loan early?

• $2,500

• $2,796

• $3,200

• $3,500

By how many months will the loan be paid off early if the monthly payment is increased?

• 144 months

• 130 months

• 116 months

• 100 months