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| Creditor Name | Current Balance | Monthly Payment |
% Interest Per Year |
# Months Without PowerPayment |
|
| Credit Card A | $4500 | $126 | 15% | 48 | |
| Bank | $4177 | $126 | 15% | 44 | |
| Department Store | $1016 | $35 | 21% | 41 | |
| Credit Card B | $5500 | $104 | 16% | 93 | |
| Gas Card | $950 | $50 | 13.90% | 22 | |
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Optional Extra Monthly Payment - $0 Optional One-Time Payment - $0 Month for One-Time Payment - $0 |
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Repayment Schedule In Exhibit B (below), the creditors are listed from Exhibit A, starting with the highest interest rate and ending with the lowest interest rate. Each column compares the number of payments it will take to repay debt, total dollars paid and the interest that will be paid for each debt with PowerPayments and without PowerPayments. The process by which this works will be explained in Exhibit C. In this example, "High Interest Rate First" is used to calculate the payment schedule. The computer arranges the creditors with the highest interest rates first. The amount of time and money saved by making PowerPayments is summarized at the bottom of the section. In this example, the five creditors are paid 3.5 years ahead of schedule with a total savings of $1417.21.
| Exhibit B: Repayment Schedule | ||||||
| Without PowerPayments | PowerPayments - High Int. First | |||||
| Creditor Name | Number Of Payments | Total Paid | Interest Paid | Number of Payments | Total Paid | Interest Paid |
| Department Store | 41 | $1430.98 | $414.98 | 29 | $1365.99 | $349.99 |
| Credit Card A | 93 | $9588.87 | $4088.87 | 51 | $8236.65 | $2736.55 |
| Bank | 44 | $5427.41 | $1250.41 | 44 | $5427.41 | $1250.41 |
| Credit Card B | 48 | $5998.29 | $1498.29 | 48 | $5998.29 | $1498.29 |
| Gas Card | 22 | $1079.21 | $129.21 | 22 | $1079.21 | $129.21 |
| Total Monthly Payments: Varies | Total Monthly Payments $441.00 | |||||
| Months to Repay: 93 Months | Months to Repay: 51 Months | |||||
| Loan Amount Repaid: $16,143.00 | Loan Amount Repaid: $16,143.00 | |||||
| Interest Paid: $7381.76 | Interest Paid: $5964.55 | |||||
| Total Amount Paid: $23,524.76 | Total Amount Paid: $22,107.55 | |||||
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Summary of Benefits from Making PowerPayments Time Required to pay off all debts reduced by: 44 Months Amount of Money Saved: $1,417.21 |
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PowerPay Debt Reduction Calendar
The debt reduction calender (Exhibit C below) indicates the amount that each creditor will be paid each month over the projected repayment period using the Monthly Total of All Payments. As debts are paid, payments are reallocated to remaining creditors. The Monthly Total of All Payments is at the top of the calender. In this example, $441 is the total of all monthly payments paid to the five creditors. The payments shown total $441.00, although the amount paid to each creditor changes as PowerPayments are made.
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Exhibit C: PowerPay Debt Reduction Calender This is an abbreviated calender showing monthly payments for the indicated periods. |
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| Dept. Store | Credit Card B | Bank | Credit Card A | Gas Card | |
| Sept. '94 to May '96 | $35 | $104 | $126 | $126 | $50 |
| June '96 | $55.79 | $104 | $126 | $126 | $29.21 |
| July '96 | $85 | $104 | $126 | $126 | |
| Aug. '94 to Dec '96 | $85 | $104 | $126 | $126 | |
| January '97 | $65.20 | $123.80 | $126 | $126 | |
| February '97 | $189 | $126 | $126 | ||
| Mar. '97 to Mar. '98 | $189 | $126 | $126 | ||
| April '98 | $305.59 | $9.41 | $126 | ||
| May '98 to Jul '98 | $315 | $126 | $126 | ||
| August '98 | $364.71 | $76.29 | |||
| Sept. 98 | $441 | ||||
| Oct.'98 | $441 | ||||
| Nov. '98 | $57.55 | ||||
PowerPay was developed by F. Dean Miner, Jr. and Judy L. Harris, County Extension Agents, and Larry K. Bond, Extension Economics Specialist, Utah State University Cooperative Extension Service
