Amortised loan example
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John borrows 10,000 Euros at an APR of 6%. He wants to repay it in five equal instalments over five years, with the first repayment one year after he takes out the loan. How much should each repayment be?
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The solution provides a amortised loan example.
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Let each repayment equal A. Then the present value of the first repayment is A/1.06, the present value of the second repayment is A/1.06^2, and so on. The total of the ...
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