Reducing balance loans are calculated on the balance owing and not the initial amount borrowed. As payments are made, the balance owing is reduced and hence the interest charged is reduced.
How does it Work?
This video highlights how reducing balance loans work in detail.
Using a Table to Determine Information
The following videos explain examples of using a table to determine the solution.
Part 1
Part 2
Graphing a Reducing Balance Loan
The following video explains how to graph the loan
Want to learn more? Check out more of our HSC Standard Maths resources here!
