Year: 2018 | Month: September | Volume 63 | Issue 3
Generalized Mathematical Expressions for Various Repayment Plans and Long Term Cost Comparison
Gourav Kumar Vani
P.K. Awasthi
R.M. Sahu
DOI:10.30954/0424-2513.3.2018.23
Abstract:
The financial systems of the day demand greater speed and accuracy which has been provided by digitalization delivered though computers. However, iterative programmes are no better than generalized formulae in saving time and money. This necessitates efforts in finding generalized mathematical formulae. This paper attempts to derive mathematical expression for various repayment plans in general. The generalized expressions derived have been further made use in comparing the cost effectiveness of repayment plans in long run. The straight end repayment plan remains the costliest plan with partial repayment plan being less costly regardless of interest rate and repayment term involved. The cost effectiveness of other plans depends on rate of interest and term of repayment.
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