Date: Fri, 6 Jan 2006 11:49:20 -0600
From: "Tess Millay" 
Newsgroups: misc.invest.financial-plan
Subject: Re: Financial help
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	Kxznmwm4E5124TsMmk/dLtWaEEq1cQCLAoJpBz3voHsEfr2xfsyxAw==
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 wrote
> "Tess Millay"  writes:
>
> > Option 1 --
> > Refi'ing two cars and 104,500 mortgage at 5.25% and 15
years
> > yields
> > Monthly payment = $990 for 15 years
> > Total interest = $54,269
>
> Let's ignore time-value-of-money and everything which
> is the basis for fixed-income mathematics by adding up
> the total interest and ignoring time...
>
> > So Option 2 seems better, because it results in paying
$4631
> > less interest. But one still can't say anything
conclusive,
>
> That's not a valid argument.  Total interest paid is only
> half a fact, as *when* that interest is paid is equally
> essential.
>
> The rest of the details aside, please, folks, when someone
> tallies up "total interest" without a time context, a huge
> red flag should go up in your head saying "ignore this
number".

First, when someone fails to read the entire post, gently
remind them to do so. My post had an important qualifier on
this point (time value): "But given all the assumptions (and
there certainly are others I don't list but that anyone
acquainted with present and future value calculations would
notice), one could say it's practically a wash."

Second, don't criticize unless you can correct the problem
you're criticizing. Why don't you do the present value etc.
calculations and post them?

I think one of the reasons this thread was headed off into
the wild blue yonder is because no one was willing to crank
any numbers (though Bob had some good intuition) and give
the poor OP something reasonable with which to work. You're
not helping.

I don't own a financial calculator, and this sort of
calculation is not one I have a need to perform these days.
(Contrary to John A. Weeks the Third assertion, I have zero
debt, I own outright my house, small but with two car garage
and pretty nice view, and I drive a much adored 1991 Civic,
which of course I bought with cash, brand new, and love
maintaining myself, and I am damn good at it. Better than
any mathematician, anyway. I have enough to do ample skiing
and recreation and still have money left over each month. So
knock off these ridiculous assumptions which only chill
discussion here.)