Instalment and Interest rate differential: Difference between pages

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An agreed payment made by a borrower to a lender, as one amount in a schedule of payments over a period of time.
The difference between short-term interest rates prevailing in two money centres at a given moment.


If the instalments are of equal value they are said to be equated.


 
== See also ==
Repayment of a loan by equated instalments ensures that the total cash payable by the borrower, comprised of interest plus principal, remains the same for each instalment.  Most repayment mortgages are set up in this way.
* [[Interest]]
 
Equated instalments pay off varying proportions of interest and principal within each instalment, so that by the end of the schedule of instalments, the loan is paid off in full.
The proportion of interest is greatest at the start, and least at the end.
 
 
An alternative spelling is ''installment''.
 
 
==See also==
*[[Annuity factor]]
*[[Interest]]
*[[Loan]]
*[[Principal]]
 
 
=== Other resources ===
[[Media:2014_11_Nov_-_Ever_deceasing_circles.pdf| Ever decreasing circles, The Treasurer, 2014]]
 
[[Category:Long_term_funding]]

Revision as of 10:38, 22 June 2016

The difference between short-term interest rates prevailing in two money centres at a given moment.


See also