(80/20 RULE)
According to government statistics(as of 2000), the average American is (at least) $20,000.00 in debt. To service this debt, the average American pays $500.00/month;
MONTHLY PAYMENT x 12 = YEARLY
$500.00 x 12
PLAN A (Their Plan)
YEARLY X 80% = YEARLY INTEREST
$6,000.00 X .80 = $4,800.00 APPLIED TO INTEREST
YEARLY X 20% = YEARLY PRINCIPAL
$6,000.00 X .20 = $1,200.00 APPLIED TO PRINCIPAL
TOTAL DEBT (divided by) YEARLY PRINCIPAL = PAYOFF TIME
PAYOFF TIME
20,000.00 (divided by) $1,200.00 = 16.66 years to pay!
YEARS TO PAY X ANNUAL INTEREST = TOTAL INTEREST
(16.66 years x $4,800.00 = $79,999.99)
PLAN B (Lasill's Plan)
YEARLY X 80% = YEARLY PRINCIPAL
$6,000.00 X .80 = $4,800.00 APPLIED TO PRINCIPAL
YEARLY X 20% = YEARLY INTEREST
$6,000 X .20 = $1,200.00 APPLIED TO INTEREST
TOTAL DEBT (divided by) YEARLY PRINCIPAL =
PAYOFF TIME
$20,000.00 (divided by) $4,800.00 = 4.1 years to PAY!!
YEARS TO PAY X ANNUAL INTEREST = TOTAL INTEREST
(4.1 years x $1,200.00 = $4,920.00!!!)
Which sounds better to you??