They seem to be increasing the principal by the interest earned during the "grace period".

(Not my definition of a "grace period". But apparently, it follows loan conventions, according to online sources [1].)

Based on that assumption, the principal would be the following for the corresponding grace periods and *approximate* payments:

I show the 0 grace period (row 1) to demonstrate the effect of approximating the payment.

Note that about 0.625% is added to the principal for each grace-period month. And note that 7.5%/12 is 0.625%.

Because only approximate payment are presented, we don't know whether simple or compounded interest is added to the principal. According to online sources [1], I would expect compounded interest. But look at the loan contract for details.

[1] http://www.investopedia.com/terms/g/grace_period.asp

## Bookmarks