VIC: Amortisation

Objectives

• Introduction of the idea of recursion to model loan amortisations
• The use of a small program to simulate amortization for given parameters of a loan
• Further analysis of amortization via graphical analysis
• Consideration of last payment issue

Vocabulary

• Amortisation
• Final payment
• Recurrence relations
• Interest payments
• Regular premiums

About the Lesson

First principles approach to loan amortisation as a recursive relationship, and then further use of a program to model the process over the life of a loan.