Here you have 418,388, so even after ten years,

you've been paying for a third of the life of a mortgage.

And still you will have paid off less than a fifth of the outstanding balance.

And then, finally, P240, which is after 20 years, or

two-thirds of the life of the mortgage.

Here you will get 218,319, so at least you've

jumped over the threshold, because this is less than half.

But here you will still have 269,903 outstanding.

So it's kind of, well, I wouldn't say funny.

Unfortunately, you can see that you've been paying for 20 years.

That's two-thirds of the life of the mortgage.

And still, at 6%, your remaining balance is still more than half.

So that shows to you the power of discounting or,

if you will, the need to pay all these interest payments.

The story is very simple, again, it can be analyzed in this formula.

So let's say you have 500,000 outstanding.

Then you make the first payment of whatever, close to $3,000 in this case.

And this 3,000 is almost all interest.

So after the first payment, the balance changes just a tiny bit.

So the next time you accrue interest on this.

And then slowly, step by step, you start to eat out pieces from this principal.

And then by, let's say, in two-thirds of the life,

you will end up at about half of that.

And then, then the mortgage balance will go down progressively faster.

So these things are used in actual calculations in many organizers.

Now, on the Internet, you can find all these mortgage calculators

that show to you the amount of payments, monthly payments as a function.

You feed with the rate, you feed with the you feed with the life of the mortgage,

and it produces you with c.

And some of these things can be easily found too.

Well, in the real world, some mortgages, especially now, they are more advanced.

They are not fixed rate, they are adjustable rate or

they are graduated payment.

But all these things are analyzed with the use of the NPV approach.

It's much more cumbersome, but the general idea is the same.

Now, we are wrapping up this episode.

And in the next one, which is the final in the first week,

we will come back to the overall idea of NPV.

And we will see what we already know and how we will proceed from there,

again within the paradigm of fast takeoff.

We will see exactly that although we studied just a little bit,

but we already made some advancement.

And we will be able to proceed very quickly in some important areas.

Namely, in the areas of bonds and stocks.