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Heather Murray

Mortgage Project


My New Interest in Interest

While working on this project I learned some new things: that banks are weasels and why they’re so rich.  After examining the amortization spreadsheet and working through the problems associated with it I was shocked, to put it mildly.  The question/answer that really got me was the one where I was asked the number of the first payment when more of my monthly payment would be going towards the principle rather than the interest.  I started at the top of the spreadsheet and began to scroll down, and down, and still further down.  I finally found my answer sitting more halfway through the spreadsheet at number 194.  The 194th payment, 194 months in, I couldn’t believe it.  It would take me over sixteen years to make what felt like any real headway! Before this project I honestly had no idea how a mortgage worked.  I figured the banks made about ten percent off of whatever the amount was that they loaned you, but I had no idea that it was closer ninety percent, and in this case, 92.706% of the principle was paid back in addition to the full 100% of the principle amount borrowed. It’s outrageous. Needless to say, I have a whole new view of money lenders and the way interest on a mortgage works.  I will definitely think twice before penning my name to any loan.


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