11 Cashflow and Compounding
Compounding
Compounding and mortgages
Comparing the effect $5,000 per annum additional repayments has on the end balance
In the table to the right we show a repayment schedule for a $250,000 loan with an interest rate of 6.5% pa.
In this table we assume an annual repayment amount of $25,000.
On the next page we look at the same loan, however, we increase the annual repayment amount by $5,000 to $30,000 per annum.
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