Analysis Table 1
Print

May 1991

Case 1: Endowment Mortgage

£35,000 Borrowed over 20 Years @ 11.85% p.a.

Analysis Table 1

A

B

C

D

E

F

G

H

I

J

K

L

Year

Gross Cash Flow Out

Interest Paid

Premium Paid

Interest
Applicable
for Tax
Relief

Tax Relief
on Interest

Tax
Relief on
Premium

Net Cash
Flow Out

@ y% Internal Rate of Return

Tax Relief at 29% p.a.

@13%

@13.5%

@13.15%

13.158%

pv

pv

pv

pv

1

5103.90

4147.50

956.40

3200.00

928.00

34.67

4141.23

3664.81

3648.66

3659.95

3659.69

FV = P(1 + i )n
+£12,770

= £35,000 (1.1185)20
+£12,770

i.e. FV = £341,461.00

2

5103.90

4147.50

956.40

3200.00

928.00

34.67

4141.23

3243.19

3214.68

3234.60

3234.14

3

5103.90

4147.50

956.40

3200.00

928.00

34.67

4141.23

2870.08

2832.32

2858.68

2858.07

4

5103.90

4147.50

956.40

3200.00

928.00

34.67

4141.23

2539.89

2495.43

2526.45

2525.74

5

5103.90

4147.50

956.40

3200.00

928.00

34.67

4141.23

2247.69

2198.62

2232.83

2232.05

6

5103.90

4147.50

956.40

3200.00

928.00

34.67

4141.23

1989.11

1937.11

1973.34

1972.50

7

5103.90

4147.50

956.40

3200.00

928.00

34.67

4141.23

1760.27

1706.70

1744.00

1743.14

8

5103.90

4147.50

956.40

3200.00

928.00

34.67

4141.23

1557.76

1503.70

1541.32

1540.45

9

5103.90

4147.50

956.40

3200.00

928.00

34.67

4141.23

1378.55

1324.85

1362.19

1361.33

10

5103.90

4147.50

956.40

3200.00

928.00

34.67

4141.23

1219.96

1167.27

1203.88

1203.03

11

5103.90

4147.50

956.40

3200.00

928.00

34.67

4141.23

1079.61

1028.43

1063.97

1063.14

12

5103.90

4147.50

956.40

3200.00

928.00

34.67

4141.23

955.41

906.11

940.32

939.52

13

5103.90

4147.50

956.40

3200.00

928.00

34.67

4141.23

845.49

798.33

831.04

830.27

14

5103.90

4147.50

956.40

3200.00

928.00

34.67

4141.23

748.22

703.38

734.46

733.73

15

5103.90

4147.50

956.40

3200.00

928.00

34.67

4141.23

662.14

619.71

649.10

648.41

16

5103.90

4147.50

956.40

3200.00

928.00

34.67

4141.23

585.97

546.00

573.66

573.01

17

5103.90

4147.50

956.40

3200.00

928.00

34.67

4141.23

518.56

481.06

506.99

506.38

18

5103.90

4147.50

956.40

3200.00

928.00

34.67

4141.23

458.90

423.84

448.07

447.50

19

5103.90

4147.50

956.40

3200.00

928.00

34.67

4141.23

406.11

373.43

396.00

395.47

20

5103.90

4147.50

956.40

3200.00

928.00

34.67

4141.23

359.39

329.01

349.98

349.48

PV = pv

29,091.11 28,238.64 28,830.83

28,817.05

yields FV 4

335,219.41 355,435.67 341,152.31

341,471.75

OK