160K 15y 6.76% 1,415.86 x180 $254,854.80

$604,445.91

What is the larger number?

Year Year Deposits Year Interest Total Deposits Total Interest Balance

1 $16,990.32 $372.66 $16,990.32 $372.66 $17,362.98

2 $16,990.32 $1,080.06 $33,980.64 $1,452.72 $35,433.36

3 $16,990.32 $1,816.27 $50,970.96 $3,268.99 $54,239.95

4 $16,990.32 $2,582.48 $67,961.28 $5,851.47 $73,812.75

5 $16,990.32 $3,379.91 $84,951.60 $9,231.37 $94,182.97

6 $16,990.32 $4,209.82 $101,941.92 $13,441.19 $115,383.11

7 $16,990.32 $5,073.55 $118,932.24 $18,514.74 $137,446.98

8 $16,990.32 $5,972.46 $135,922.56 $24,487.20 $160,409.76

9 $16,990.32 $6,908.00 $152,912.88 $31,395.20 $184,308.08

10 $16,990.32 $7,881.66 $169,903.20 $39,276.86 $209,180.06

11 $16,990.32 $8,894.98 $186,893.52 $48,171.84 $235,065.36

12 $16,990.32 $9,949.59 $203,883.84 $58,121.42 $262,005.26

13 $16,990.32 $11,047.16 $220,874.16 $69,168.58 $290,042.74

14 $16,990.32 $12,189.45 $237,864.48 $81,358.03 $319,222.51

15 $16,990.32 $13,378.28 $254,854.80 $94,736.31 $349,591.11

I somehow imagined that the above chart would blur a bit as it did.

However,

When the bank gives a loan of 160,000.....At the moment you make the very first payment they can reinvest that payment.

So you will be making 180 payments, They will be reinvesting all 180 payments as they receive them from you. (It will take them 182 months).

At the end of those 182 months...you paid the bank back 160 plus 95.....and, they invested at 4% and collected an additional $349.591,11.

Their $160,000 investment has returned to them as $604,445.91 I find this amazingly interesting.

Hi again, Smoke.

Yes, banks are able to do amazing things with our money! They're also able to do amazing things with money they get cheaply from the FED.

Your example overlooks a few things, such as the bank's cost of capital. If they are lending out of on-hand deposits (and only a few do, based on fractional reserve banking), then they're paying out a measly 1-2% interest to their passbook savings and CD holders. Not much, but it does cut into their overall profit. Otherwise, they're lending money borrowed from the FED, and you just have to discount their profit via the "spread" of what they pay to access that cheap capital.

But overall, yes, your point stands. Insurance companies do the same with the premiums they receive.

I had a high school English teacher who was in law school prior to going into teaching. He said one thing he learned is there are two groups who NEVER lose money: law firms and insurance companies. While this was a bit of hyperbole (law firms and insurance companies do fail from time to time), his point was they're both VERY profitable in ways we mere mortals can scarcely imagine. You've just found one of them. ;-)

I didn't want to estimate their overhead because my example used exact numbers. Didn't want to spoil the soup with an average or % tossed in.

I feel deeply bad these last weeks. I'm paying off another couple shortly and all that money should of gone to friends, instead random banks earned it.

I came to these people years ago asking them to invest in me and nothing. nadda, zippo.

Going forward the opportunities for others are drying up. I simply don't need their loans at this point. I believe in a warm towel after a cold swim.

I'm at the warm towel part. No need to borrow anymore. This time next month I may be down to just four checks a month. ....five...forgot one.

Thanks for checking the math and logic. I needed to make certain I had not counted anything twice.