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Maths Standard

Reducing Balance Loans

What does a reducing balance loan work?

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. This video highlights how reducing balance loans work in HSC Standard Math.

 

Using a table for a reducing balance loan

The following videos explain examples of using a table to determine the solution to a reducing balance loan.

Part 1

Part 2

 

Graphing a reducing balance loan

The following video explains how to graph a reducing balance loan