METHODS OF REPAYMENT

Loan of P10.0million with an interest rate of 10% per annum payable in 10 years.

Straight Line Method (without grace period) Straight Line Method (with grace period of 5 years)
Year Prinicipal Interest Total Balance on Year Prinicipal Interest Total
Repayment Principal Repayment
0 10,000,000.00 0
1 1,000,000.00 1,000,000.00 2,000,000.00 9,000,000.00 1 1,000,000.00 1,000,000.00
2 1,000,000.00 900,000.00 1,900,000.00 8,000,000.00 2 1,000,000.00 1,000,000.00
3 1,000,000.00 800,000.00 1,800,000.00 7,000,000.00 3 1,000,000.00 1,000,000.00
4 1,000,000.00 700,000.00 1,700,000.00 6,000,000.00 4 1,000,000.00 1,000,000.00
5 1,000,000.00 600,000.00 1,600,000.00 5,000,000.00 5 1,000,000.00 1,000,000.00
6 1,000,000.00 500,000.00 1,500,000.00 4,000,000.00 6 1,000,000.00 1,000,000.00 2,000,000.00
7 1,000,000.00 400,000.00 1,400,000.00 3,000,000.00 7 1,000,000.00 900,000.00 1,900,000.00
8 1,000,000.00 300,000.00 1,300,000.00 2,000,000.00 8 1,000,000.00 800,000.00 1,800,000.00
9 1,000,000.00 200,000.00 1,200,000.00 1,000,000.00 9 1,000,000.00 700,000.00 1,700,000.00
10 1,000,000.00 100,000.00 1,100,000.00 0.00 10 1,000,000.00 600,000.00 1,600,000.00
10,000,000.00 5,500,000.00 15,500,000.00 11 1,000,000.00 500,000.00 1,500,000.00
12 1,000,000.00 400,000.00 1,400,000.00
Present Value Method 13 1,000,000.00 300,000.00 1,300,000.00
Year Prinicipal Interest Total Balance on 14 1,000,000.00 200,000.00 1,200,000.00
Repayment Principal 15 1,000,000.00 100,000.00 1,100,000.00
0 10,000,000.00 Total 10,000,000.00 10,500,000.00 20,500,000.00
1 627,453.98 1,000,000.00 1,627,453.98 9,372,546.02
2 690,199.37 937,254.60 1,627,453.98 8,682,346.65
3 759,219.31 868,234.66 1,627,453.98 7,923,127.34
4 835,141.24 792,312.73 1,627,453.98 7,087,986.09
5 918,655.37 708,798.61 1,627,453.98 6,169,330.73
6 1,010,520.90 616,933.07 1,627,453.98 5,158,809.82
7 1,111,572.99 515,880.98 1,627,453.98 4,047,236.83
8 1,222,730.29 404,723.68 1,627,453.98 2,824,506.53
9 1,345,003.32 282,450.65 1,627,453.98 1,479,503.21
10 1,479,503.66 147,950.32 1,627,453.98 0.00
10,000,000.45 6,274,539.32 16,274,539.77

Factor @ 10 years from Table II = 6.144567

 10,000,000.00
= 1,627,453.98
6.144567

10,000,000.00(10%) = Interest --> 1,000,000.00 9,372,546.02(10%) = 937,254.60

1,627,453.98 - 1,000,000.00 = 627,453.98 1,627,453.98 - 937,254.60 = 690,199.38
10,000,000.00 - 627,453.98 = 9,372,546.02 9,372,546.02 - 690,199.38 = 8,682,346.64
Balance on
Principal
10,000,000.00
10,000,000.00
10,000,000.00
10,000,000.00
10,000,000.00
10,000,000.00
9,000,000.00
8,000,000.00
7,000,000.00
6,000,000.00
5,000,000.00
4,000,000.00
3,000,000.00
2,000,000.00
1,000,000.00
0.00
METHODS OF REPAYMENT

Loan of P10.0million with an interest rate of 10% per annum

Straight Line Method (with grace period of 5 years)

Year Prinicipal Interest Total Balance on

Repayment Principal
0 10,000,000.00
1 1,000,000.00 1,000,000.00 10,000,000.00
2 1,000,000.00 1,000,000.00 10,000,000.00
3 1,000,000.00 1,000,000.00 10,000,000.00
4 1,000,000.00 1,000,000.00 10,000,000.00
5 1,000,000.00 1,000,000.00 10,000,000.00
6 1,000,000.00 1,000,000.00 2,000,000.00 9,000,000.00
7 1,000,000.00 900,000.00 1,900,000.00 8,000,000.00
8 1,000,000.00 800,000.00 1,800,000.00 7,000,000.00
9 1,000,000.00 700,000.00 1,700,000.00 6,000,000.00
10 1,000,000.00 600,000.00 1,600,000.00 5,000,000.00
11 1,000,000.00 500,000.00 1,500,000.00 4,000,000.00
12 1,000,000.00 400,000.00 1,400,000.00 3,000,000.00
13 1,000,000.00 300,000.00 1,300,000.00 2,000,000.00
14 1,000,000.00 200,000.00 1,200,000.00 1,000,000.00
15 1,000,000.00 100,000.00 1,100,000.00 0.00
Total 10,000,000.00 10,500,000.00 20,500,000.00

Present Value Method (with grace period of 5 years)

Year Prinicipal Interest Total Balance on
Repayment Principal
0 10,000,000.00
1 627,453.98 1,000,000.00 1,627,453.98 9,372,546.02
2 690,199.37 937,254.60 1,627,453.98 8,682,346.65
3 759,219.31 868,234.66 1,627,453.98 7,923,127.34
4 835,141.24 792,312.73 1,627,453.98 7,087,986.09
5 918,655.37 708,798.61 1,627,453.98 6,169,330.73
6 1,010,520.90 616,933.07 1,627,453.98 5,158,809.82
7 1,111,572.99 515,880.98 1,627,453.98 4,047,236.83
8 1,222,730.29 404,723.68 1,627,453.98 2,824,506.53
9 1,345,003.32 282,450.65 1,627,453.98 1,479,503.21
10 1,479,503.66 147,950.32 1,627,453.98 0.00
11
12
13
14
15
10,000,000.45 6,274,539.32 16,274,539.77

Factor @ 10 years from Table II = 6.144567

10,000,000.00
= 1,627,453.98
6.144567

10,000,000.00(10%) = Interest --> 1,000,000.00

1,627,453.98 - 1,000,000.00 = 627,453.98
10,000,000.00 - 627,453.98 = 9,372,546.02

9,372,546.02(10%) = 937,254.60
1,627,453.98 - 937,254.60 = 690,199.38
9,372,546.02 - 690,199.38 = 8,682,346.64