7. Show the formula for the level pay loan amount as the sum of current interest and...

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7. Show the formula for the level pay loan amount as the sum of current interest and current principal. Subtracting the interest amount from M gives you an alternative formulation for the principal portion of the level payment. What is it? Describe the meaning of principal in words, using these two equivalent formulas. Derive the formula for principal given in this book using the balance formula.

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Elements Of Structured Finance

ISBN: 9780195179989

1st Edition

Authors: Ann Rutledge, Sylvain Raynes

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