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    What is the relationship between the variables in a loan amortization and the total interest cost? Consider the variables of interest rates, amount borrowed, down payment, prepayment, and term of loan in answering this question.

    Please provide an example.

    © BrainMass Inc. brainmass.com December 24, 2021, 9:52 pm ad1c9bdddf
    https://brainmass.com/business/interest-rates/relationship-between-variables-loan-amortization-420556

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    What is the relationship between the variables in a loan amortization and the total interest cost? Consider the variables of interest rates, amount borrowed, down payment, prepayment, and term of loan in answering this question.

    Please provide an example.

    If loan interest rates are higher, the payment on the loan and the interest payments will also be higher, in conjunction with the increased loan interest rate. Although the principal amount of the loan does not change, the rates will, according to the loan interest rate. If the down payment made by the consumer is higher, it will lower periodic payments on the loan. If the loan is prepaid, it will drop the total amount of interest on the loan accordingly, and shorten the term of the loan at the time of prepayment on the loan.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    © BrainMass Inc. brainmass.com December 24, 2021, 9:52 pm ad1c9bdddf>
    https://brainmass.com/business/interest-rates/relationship-between-variables-loan-amortization-420556

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