The Pipe That Drains Faster Than It Fills - debt, APR and the minimum-payment trap

The Minimum Payment board turns the tank upside down: the water is what you owe, interest pours in at 2% of the level every month, and your payment drains it out. Pay exactly what pours in and the level never moves. This lesson is why, and what every extra unit of payment buys.

Before you start. From Nineteen and Six - where the water goes: the tank, and cash flow as what comes in minus what goes out. From Why a Coin Today Beats a Coin Next Year - present value and discounting and Compound Interest, the 8th Wonder: money left in the reservoir earns interest on its interest. From The Rain Barrel for the Dry Season - emergency funds and liquidity: a storm with no barrel beside the tank gets paid for with borrowed water. This lesson is what that borrowed water costs.