Decision Studio

Pay off debt or invest?

See what one extra EMI each year does to your debt, or invest the same amount instead.

Currency Labels only; no conversion.

Illustrative inputs. Use your own quotes.

Extra-payment schedule

1 extra EMI(s) = $400 per year, paid in month 12. The other path invests the same amount that month.

Your comparison

Comparison duration

years

How long to compare the two paths, independent of payoff.Outstanding balance

Current principal, excluding future interest.Debt interest rate

Annual nominal rate, held constant throughout.Investment return after fees & tax

%/yr

Effective annual assumption; starts at zero. Negative returns are allowed.Regular monthly EMI

$/mo

Kept fixed until payoff; must cover more than monthly interest.Extra EMIs per year

EMIs/yr

1 means one additional monthly payment each year, applied directly to principal.When to pay the extra EMI

month

12 means the end of each comparison year; 1 means the first month. Not a calendar month.

After 10 years · Your assumptions

Extra EMI to debt leaves you $349 ahead.

Net worth from this decision: investments minus remaining debt. Common assets are excluded.

Extra EMI to debt

$27,940

Invest instead

$27,591

Net worth over time

Repayment & interest

Interest saved: $349

Debt paid off 5 months earlier. Savings cover the selected 10 years.

Extra EMI to debt

Payoff: month 57

Remaining debt: $0

Investments: $27,940

Interest paid: $4,060

Invest instead

Payoff: month 62

Remaining debt: $0

Investments: $27,591

Interest paid: $4,409

Annual breakdown & CSV

Year	Extra EMI to debt	Invest instead
1	-$16,280	-$16,280
2	-$12,251	-$12,284
3	-$7,888	-$7,991
4	-$3,163	-$3,373
5	$1,940	$1,594
6	$7,140	$6,791
7	$12,340	$11,991
8	$17,540	$17,191
9	$22,740	$22,391
10	$27,940	$27,591

Or copy the scenario

Currency,CAD
Assumption,Value
years,10
balance,20000
rate,8
payment,400
extra,200
extraMode,1
extraEmis,1
extraMonth,12
return,0
Method 1,"Both paths budget 400.00 each month plus 1 extra EMI(s), totaling 400.00, in month 12 of each comparison year. Month 1 is the first month of the projection, not a calendar month. The invest path invests the same extra amount at the same time."
Method 2,"Extra payments reduce principal after that month's interest and regular EMI. Any amount beyond the final debt payment is invested. After payoff, both paths continue investing the scheduled budget, including annual extra amounts. Interest compounds monthly."
Method 3,"Investments compound monthly at your effective after-fee, after-tax annual return, before month-end contributions. Net worth here is investments minus remaining debt; common assets are excluded."
Method 4,"Rates stay constant. Returns are assumptions, not guarantees. Debt interest is assumed non-deductible. Prepayment penalties, emergency funds, market volatility, taxes beyond the entered net return and changes in payment requirements are outside this model. Interest savings shown cover only the selected comparison period."

Year,Extra EMI to debt,Invest instead,Extra EMI to debt debt,Invest instead debt,Extra EMI to debt investments,Invest instead investments,Extra EMI to debt cumulative interest,Invest instead cumulative interest
1.00,-16280.02,-16280.02,16280.02,16680.02,0.00,400.00,1480.02,1480.02
2.00,-12251.28,-12284.48,12251.28,13084.48,0.00,800.00,2651.28,2684.48
3.00,-7888.16,-7990.52,7888.16,9190.52,0.00,1200.00,3488.16,3590.52
4.00,-3162.91,-3373.36,3162.91,4973.36,0.00,1600.00,3962.91,4173.36
5.00,1939.69,1593.83,0.00,406.17,1939.69,2000.00,4060.31,4406.17
6.00,7139.69,6791.06,0.00,0.00,7139.69,6791.06,4060.31,4408.94
7.00,12339.69,11991.06,0.00,0.00,12339.69,11991.06,4060.31,4408.94
8.00,17539.69,17191.06,0.00,0.00,17539.69,17191.06,4060.31,4408.94
9.00,22739.69,22391.06,0.00,0.00,22739.69,22391.06,4060.31,4408.94
10.00,27939.69,27591.06,0.00,0.00,27939.69,27591.06,4060.31,4408.94

Method & assumptions

Both paths budget 400.00 each month plus 1 extra EMI(s), totaling 400.00, in month 12 of each comparison year. Month 1 is the first month of the projection, not a calendar month. The invest path invests the same extra amount at the same time.

Extra payments reduce principal after that month's interest and regular EMI. Any amount beyond the final debt payment is invested. After payoff, both paths continue investing the scheduled budget, including annual extra amounts. Interest compounds monthly.

Investments compound monthly at your effective after-fee, after-tax annual return, before month-end contributions. Net worth here is investments minus remaining debt; common assets are excluded.

Rates stay constant. Returns are assumptions, not guarantees. Debt interest is assumed non-deductible. Prepayment penalties, emergency funds, market volatility, taxes beyond the entered net return and changes in payment requirements are outside this model. Interest savings shown cover only the selected comparison period.

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