Extra-Payment Payoff Impact implementation

Binding contract

This record describes what an executable surface must bind and validate. It does not claim that a public calculator, package, or production route is deployed.

Record owner

Guth Instruments

Lifecycle

verified-clean

Evidence ID

t3-020

Effect

Computation or source lookup only

Input and validation requirements

A payment equal to the periodic interest on the initial principal produces a zero denominator in the closed-form payoff calculation and an invariant balance, so the loan never pays off. The instrument must reject or explicitly report this undefined/no-payoff case. Sign conventions for extra_payment can also change a valid payoff into this no-payoff case.

Required corrections

No binding erratum is attached to this unique-name record. Implementers must still preserve the declared units, domain, and failure behavior.

Inspectable interface fixture

The sample below is evidence for interface and validation tests, not a production implementation.

{
  "inputs": {
    "principal": 1000,
    "annual_rate": 0.12,
    "term_months": null,
    "scheduled_payment": 250,
    "extra_payment": 100,
    "frequency": "monthly",
    "extra_mode": "per_period",
    "start_date": "2025-01-01"
  },
  "expected_outputs": {
    "new_payoff_date": "2025-04-01",
    "original_payoff_date": "2025-06-01",
    "interest_saved": 5.9927976,
    "months_saved": 2
  },
  "working": "Monthly rate = 0.12 / 12 = 0.01. Original schedule: B1 = 1000*1.01 - 250 = 760; B2 = 760*1.01 - 250 = 517.6; B3 = 517.6*1.01 - 250 = 272.776; B4 = 272.776*1.01 - 250 = 25.50376; B5 = 25.50376*1.01 = 25.7587976, so the final original payment is 25.7587976 and original interest = 25.7587976. Accelerated payment = 250 + 100 = 350. B1 = 1000*1.01 - 350 = 660; B2 = 660*1.01 - 350 = 316.6; B3 = 316.6*1.01 = 319.766, so the final accelerated payment is 319.766 and accelerated interest = 2*350 + 319.766 - 1000 = 19.766. Interest saved = 25.7587976 - 19.766 = 5.9927976. Months saved = 5 - 3 = 2. The third payment is on 2025-04-01."
}

Other records

Sources and evidence

These pointers bind the page to evidence. They do not grant authority or collapse verification into deployment.

• VERIFIED_LEDGER.json
• evidence-tranche3/tranche3-results.json