This does not factor in interest on the original loan. $1,776 in year 24 is not worth $1,776 today, it's worth considerably less[1]. Here's a breakdown at a co

This does not factor in interest on the original loan. $1,776 in year 24 is not worth $1,776 today, it's worth considerably less[1]. Here's a breakdown at a couple of different interest rates of $1,776 in year 24 in today's dollars using annual compounding (it'd be a bit more lopsided using monthly): %0 $1,776 %1 $1,398 %2 $1,104 %3 $ 873 %4 $ 692 %5 $ 550 %6 $ 438 To do this calculation correctly either the future payments need to be converted into today's dollars or interest on the original loan needs to added to it (i.e. calc in future dollars). [1]: http://en.wikipedia.org/wiki/Net_present_value http://en.wikipedia.org/wiki/Net_present_value