USING A SPREADSHEET TO CALCULATE EFFECTIVE INTE

1a) Interest Based on Original Loan Amount

INPUTS Original Loan Amount Fees and Commission Loan Period Nominal Interest Rate PV PV n i USD USD Months % per month 100 3 2

OUTPUTS Monthly Payment Monthly Payment - Principal Monthly Payment - Interest Monthly Payment - Total USD USD USD 33 2 35

Total Amount Paid Total Paid (Principal plus Interest) Total Paid (Interest only) 106 6

Effective Interest Rate

1b) Interest Based on Declining Balance

INPUTS Original Loan Amount Fees and Commission Loan Period PV PV n USD USD Months 100,000 60

Nominal Interest Rate

% per month

OUTPUTS Monthly Payment Monthly Payment - Total USD 2,224

Total Amount Paid Total Paid (Principal plus Interest) Total Paid (Interest only) USD 133,467 33,467

Effective Interest Rate

2) Interest Deducted Up Front from Original Loan Amount

INPUTS Total Loan Amount Loan Period Nominal Interest Rate PV n i USD Months % per month 100 3 2

OUTPUTS Amortised Monthly Payment Amortised Monthly Payment - Principal Amortised Monthly Payment - Interest Amortised Monthly Payment - Total USD USD USD 33 2 35

Actual Monthly Payment Actual Monthly Payment (Principal Only) Amount Paid in Interest USD USD 33 4

Original Loan less Interest Payment

USD

96

Effective Interest Rate

3) Loans with Compensating Balance

INPUTS Total Loan Amount (including fees) Loan Period Nominal Interest Rate Amount Required to be kept on Deposit PV n i USD Months % per month USD 100 3 2 25

OUTPUTS Amount Received by Borrower Amount Received USD 75

Amortised Monthly Payment Amortised Monthly Payment - Principal Amortised Monthly Payment - Interest Amortised Monthly Payment - Total USD USD USD 33 2 35

Effective Monthly Payment Income Forfeited Effective Monthly Payment USD USD 1 35

Payment Schedule Amount Received Payment Month 1 Payment Month 2 Payment Month 3 (Final Month - when deposit is returned) 75 35 35 10

Internal Rate of Return <=> Effective Interest Rate

FECTIVE INTEREST RATES

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