Financial issues do pose great problems to many people across the world especially the business people. They normally try to balance their books of records when trying to offset the debts they have. Many scholars put it that the best way of solving the menace of repaying back the loan is by ensuring that he or she lists all the expenses he or she has in order to make the correct move in offsetting the debts.
One should try and commit himself or herself in paying the minimum amount of the on every debt he has. This will help him or her offset the bigger part of the loan and remains the least he can be able to repay maybe at once. On should try and arrange the number of debts he or she has in an ascending order like the smallest to the biggest debts in case they are from different creditors. This will help the person deal with the debts and finally finds him or her free from any debt.
One major way of solving the crisis of repaying back the loan is by calculating the amount of money the debtor will be able to pay within a given period of time as stated in the paper is by calculating the value for a given time and then making a comparison from the other value of the duration. For example when calculating the amount by using the simple interest formula can be given by:
A=P (1+r100)n
n= 20years
r= 5.75%
inserting the values in the equation;
A= 141000(1+5.75100)20
A=141000(1.0575)20
A=$431346.85
In the case of the value of n being 25years, amount can be gotten by:
A= 141000(1+5.75/100)25
A= $570464.36
The interest rate that would define the payment method after 20years is given by the formula
I= Amount – the Principal amount
= $431346.85 – 141000
= $290246.85
Reference
Financial Project. Retrieved from; http://math.about.com/library/weekly/aa042002a.htm; on 23rd November, 2013.
