Reducing-balance loans, buy now pay later and credit cards

What this note covers

1. What is a Reducing-Balance Loan?
2. Modelling a Loan Period by Period (up to Four Periods)
3. Finding the Repayment from a Table of Interest Factors or a Spreadsheet
4. The Amortisation Table: Modelling a Loan in a Spreadsheet
5. Changing the Repayment Frequency, Extra Repayments and Lump Sums
6. Comparing Loan Costs: Buy Now Pay Later, Short-Term and Long-Term Loans
7. Credit Cards as Reducing-Balance Loans: Rates, Fees and the Interest-Free Period
8. Credit Card Interest, Statements and the Minimum Payment
9. Choosing a Credit Option for Short-, Medium- and Long-Term Goals
10. Total Paid, Amount Still Owing and Time to Repay: Reading Spreadsheet Outputs
11. Exam Strategy and Common Traps

11 sections · 15 key terms & formulas · 7 common mistakes

Common questions