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TASMathematics ApplicationsQuick questions
Unit 4
Quick questions on Reducing-Balance Loans and Amortisation - TCE Mathematics Applications (Tasmania)
4short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.
What is the amortisation table?Show answer
An amortisation table records, for each period, the interest charged, the principal repaid, and the new balance. It makes the inner workings of each repayment visible.
What is split the first \450$ repayment?Show answer
Of the first repayment, \100\ pays down the debt. In later months the interest portion is smaller because the balance is lower.
What is total interest paid?Show answer
The total interest over the life of the loan is the sum of all repayments minus the amount originally borrowed. This is often the figure that surprises borrowers, because over many years the interest can rival the principal.
What is the final repayment?Show answer
The last repayment is usually smaller than the rest, because a full fixed repayment would overshoot and leave a negative balance. The final payment is exactly the outstanding balance plus its final period of interest, clearing the loan to zero.
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