Compare the filled in numbers of the FIRST ROW with your Excel
document, and then
fill in the rest of only the FIRST ROW
of Table 1 with NUMBERS.
For the year 2 (24 months)
and year 5 balances, be careful to look in the A column for the proper
month (NOT the gray markers, which are numbered differently than the
month  for example, grey 24 is only month 19) and then
look at the corresponding E value for the loan balance.
TABLE 1

monthly payment
 1st yr total interest
 Year 2 balance
 Year 5 balance
 total interest paid

Original Info
 $546.20 


$79,054.61 
$112,419.07 
Option 1 Smaller Loan




$77,177.10 

Option 2 Lower Rate




$78,601.16 

Option 2 + $20 Pay Extra $20




$77,196.75 

Before I finalized
all the bank payment numbers,
I found out that a deceased relative was leaving me some money,
which would arrive before I closed the loan.
The vice
president gave me two options.
Option 1: Take out
a smaller loan
I could reduce the loan amount by $2000 (ie change B2 to read
=.8*B12000 in the FORMULA BAR  do not change the amount in the B2
box itself  it is much easier to change it in the formula bar).
Notice that this will change the
rest of the amortization table.
Verify that you have the same year 5 balance and then
fill in the SECOND ROW of table 1 with numbers.
Option 2: Buy down the rate
I could leave the loan amount the same, and pay
to reduce the rate from 6.75% down to 6.25%.
So change C2 to read =.0625/12 by doing this in the FORMULA BAR
after clicking on C2. Click on B2 and change it back to =.8*B1
in the FORMULA BAR.
Verify that you have the same year 5 balance
and then fill in the THIRD ROW of
table 1.
Paying extra each month on option 2.
If I choose option 2, then I have a lower monthly payment.
Perhaps I can afford to pay more per month. Let's investigate this to
see what happens.
Using option 2, what happens if I
can pay an extra $20 each month?
Namely,
b3 changes via adding +20 at the end
to =PMT(C2,360,B2) + 20.