General · Unit 4 · reducing-balance loan

Interest grows, then the payment cuts

Each period: multiply by R, then subtract the payment. Watch the order — interest is charged before you repay.

Reducing-balance loan Period 0
+interest
Interest charged
$0
Balance owing
−payment
Your payment
n Opening Interest Payment Closing

Past periods stay stacked — read total interest from the Interest column.

Loan calculator

Run one period first — then free parameters unlock.

This period

Time

n0

Jump recomputes the ledger instantly. Next period still plays interest, then payment.

Working