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in BUS 2016H - Financial Mathematics by (170 points)


Regarding tut 9 Q4, how would we account for the redemption change in excel? (i,e. what would we multiply it to)

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by (740 points)

Hi Matt

I'm assuming you mean Q3 of tut 9. You could have:

  • a column of the nominal outstanding (which would decrease by R10000 each payment) 
  • a column for redemption payments which would be R10000 for the first 15 years and R12000 thereafter. 

Generally, when you have something that changes over time, an easy way to deal with it is putting a new column for it.

Hope that helps.