Is My Math Right on This Loan Scenario?

[Theo Z.]

Two years ago, I borrowed money from an investor which I used towards a down payment on a 20-unit apartment complex. Terms on the loan were:

Amount: $100,000

Rate: 8.0%

Amortization: 25 years

Scheduled monthly payments are $771.82. However, my properties have done well and I’ve been aggressively paying down extra principal on this loan. Current remaining principal balance is $62,178.13.

Here is my question. I just sold one of my other apartment buildings and have a nice chunk of cash. I’m planning to buy another property but it will likely take a while to find the right one. I was considering paying down this loan, with the thought process that paying down an 8% loan is comparable to earning 8% somewhere else. However, when I ran the numbers I came up with some come conclusions I didn’t expect. Maybe I’m doing something wrong so I wanted to run it by this group for some help please.

If I paid off the loan today, I will have paid around $15,245 in total interest in the 25 months of payments. Dividing $15,245 by $100,000 and further dividing by 2.0833 gives me the annual interest rate right? That comes to 7.318%. So if I pay the remaining balance off today, the actual interest rate I paid would be 7.318% right?

The option on the other extreme is to just pay the minimum payment for the remainder of the loan term. The total interest I would pay in that scenario is around $42,113 in 300 months of payments. Dividing $42,113 by $100,000 and further dividing by 25 gives an annual interest rate of 1.685%. So if I start paying only the minimum from now on, I am lowering my effective interest rate and will eventually only have paid 1.685% annual interest? Can that be right?

Am I missing something here? Unless I did the math wrong or am I reaching the wrong conclusions, it would seem the obvious choice is to just start paying the minimum. What am I missing? What would you do in my shoes?