Prime Interest Rate: 10.00%

Increased Installment Calculator

This calculator reflects the interest savings that result from an increased monthly bond repayment amount.

The assumption is that an amount over and above the required monthly bond repayment amount is paid on a monthly basis and the bond repayment period is adjusted accordingly. The result is that the capital amount of the bond will be repaid over a shorter bond period and an interest saving will therefore be derived from the increased monthly installments.

An important factor to realize is that this interest saving occurs over the entire adjusted bond period. The value calculated should not be confused with a saving in present value terms as inflation plays a significant role in the value of the interest that is saved.

An average inflation rate over the bond term is therefore included in the input variables in order to discount the interest saving amount to the present value. The result is that the interest saving is also calculated in today's monetary terms.

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