Chap 9

Question 1

Flat rate of interest

Answer 1

Total interest / amount borrowed x term

Question 2

Loan amount

Answer 2

PV of repayments

Question 3

Capital outstanding

Answer 3

PV of future repayments

Question 4

Total interest

Answer 4

Sum of repayments - full loan

Question 5

Interest component of single instalment

Answer 5

Capital outstanding after previous payment * interest rate

Question 6

Capital over given time

Answer 6

Capital outstanding at start of period - end

Question 7

Interest over given time

Answer 7

Total payments - capital repaid

Question 8

Capital component

Answer 8

Amount of instalment - interest component

Question 9

Repayment period changes during a loan

Answer 9

Recalculate capital outstanding with remaining term for new period use with X to find value of new repayment amount

Question 10

Interest changes part way through

Answer 10

Calc capital outstanding with original i

Set this equal to X times the annuity using the new i to find new repayment amount