The amount of principal repayment is: 400 thousand 4 = 100 thousand per year Payments for repayment of interest will be: 400 * 0.18 = 72 thousand; (400 - 100) * 0.18 = 54 thousand; (300 - 100) * 0.18 = 36 thousand; (200 - 100) * 0.18 = 18 thousand Repayment plan is presented in Table 10. Table 10. - Repayment Plan SEC them. Lenin based on the ratio of interest and the repayment of debt Year Balance of debt at the beginning of the year, thousand borrowing costs thousands Amortization, Interest thousand, thousand 1 2 3 4400 300 200 100 172 154 136 118 100 100 100 100 72 54 36 18 The
table shows that the cost of the loan decreases each year as well as
the ratio of interest payments and the amounts of the capital repayment. However, for the farm undesirable that borrowing costs were higher in the early period, ie when production is still weak. In
connection with this agreement between the cooperative and the borrower
can be made so that over the life of the loan the cost of debt service
on the debtor will be permanent. Here the value of the debt will be successively reduced, and therefore will shrink and interest payments. This will increase repay the debt. Then the sum is divided by the sum of interest payments and repayment of debt.
Credit Union
