Analysis Table 4
Print

May 1991

Case 2:  Endowment Mortgage

£40,000 Borrowed over 20 Years @ 11.85% p.a.

Analysis Table 4

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 52% p.a.

@ 13%

@15%

@14.5%

14.39%

pv

pv

pv

pv

1

5829.60

4740.00

1089.60

3200.00

1664.00

70.82

4094.78

3623.70

3560.67

3576.22

3579.67

FV = P(1 + i )n
+£14,643

= £40,000 (1.1185)20
+ £14,643

i.e. FV = £390,289.86

2

5829.60

4740.00

1089.60

3200.00

1664.00

70.82

4094.78

3206.81

3096.24

3123.34

3129.35

3

5829.60

4740.00

1089.60

3200.00

1664.00

70.82

4094.78

2837.89

2692.38

2727.81

2735.69

4

5829.60

4740.00

1089.60

3200.00

1664.00

70.82

4094.78

2511.41

2341.20

2382.37

2391.54

5

5829.60

4740.00

1089.60

3200.00

1664.00

70.82

4094.78

2222.48

2035.83

2080.67

2090.69

6

5829.60

4740.00

1089.60

3200.00

1664.00

70.82

4094.78

1966.80

1770.29

1817.18

1827.69

7

5829.60

4740.00

1089.60

3200.00

1664.00

70.82

4094.78

1740.53

1539.38

1587.06

1597.77

8

5829.60

4740.00

1089.60

3200.00

1664.00

70.82

4094.78

1540.29

1338.60

1386.07

1396.77

9

5829.60

4740.00

1089.60

3200.00

1664.00

70.82

4094.78

1363.09

1163.99

1210.55

1221.06

10

5829.60

4740.00

1089.60

3200.00

1664.00

70.82

4094.78

1206.27

1012.17

1057.25

1067.46

11

5829.60

4740.00

1089.60

3200.00

1664.00

70.82

4094.78

1067.50

880.15

923.36

933.17

12

5829.60

4740.00

1089.60

3200.00

1664.00

70.82

4094.78

944.69

765.34

806.43

815.78

13

5829.60

4740.00

1089.60

3200.00

1664.00

70.82

4094.78

836.01

665.52

704.30

713.16

14

5829.60

4740.00

1089.60

3200.00

1664.00

70.82

4094.78

739.83

578.71

615.11

623.44

15

5829.60

4740.00

1089.60

3200.00

1664.00

70.82

4094.78

654.72

503.23

537.22

545.02

16

5829.60

4740.00

1089.60

3200.00

1664.00

70.82

4094.78

579.40

437.59

469.18

476.45

17

5829.60

4740.00

1089.60

3200.00

1664.00

70.82

4094.78

512.74

380.51

409.77

416.52

18

5829.60

4740.00

1089.60

3200.00

1664.00

70.82

4094.78

453.75

330.88

357.88

364.12

19

5829.60

4740.00

1089.60

3200.00

1664.00

70.82

4094.78

401.55

287.72

312.55

318.32

20

5829.60

4740.00

1089.60

3200.00

1664.00

70.82

4094.78

355.35

250.19

272.97

278.27

PV = pv

28,764.81

25,630.59

26,357.29

26,521.94

yields FV 4

331,459.43

419,484.01

395,376.17

390,271.19

OK