Education Technology

Amortisation

Published on 08/08/2017

Activity Overview

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.

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.