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Part 4:
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More Complex Arithmetic Skills |
| Loan Repayments by Instalments If you borrow money from a credit company you frequently have to repay part of the loan every so often. Any interest charged is calculated on the reducing balance, i.e. on what you still owe. Note that this is a very much simplified version of what really happens with credit cards, where you are charged by the day! Example 4.6 A man borrowed £500 with an agreement to repay £150 in a lump sum at the end of each year. Interest of 8% was to be charged on the amount outstanding each year. How much is outstanding after 3 repayments? |
