Interest-Only Loans (VCE SSCE General Mathematics): Flashcards

Loan where you only pay interest, principal stays same

Stays exactly the same throughout loan term

Loan balance increases

Loan balance stays constant (interest-only loan)

Loan balance decreases

$D = \frac{r}{100 \times p} \times V_0$

Annual interest rate (as percentage)

Number of compounding periods per year

Principal (original amount borrowed)

Investment purposes (property or shares)