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APPENDICES

APPENDIX 9/1

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Case 2 Analysis Tables

Analysis Table 4: Case 2 — Endowment Mortgage.

Analysis Table 5: Case 2 — Repayment Mortgage.

Analysis Table 6: Case 2 — An 18 Year Repayment Mortgage.

Note! Print the Tables separately. The Tables are not included when printing the Chapter.

 

Analysis Table 4

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%

npv

npv

npv

npv

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

NPV = ?npv

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

 

Analysis Table 5

May 1991

Case 2: Repayment Mortgage

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

Analysis Table 5

A

B

C

D

E

F

G

H

I

J

K

L

Year

Gross Cash Flow Out

Interest Paid

Principal Repaid

Interest
Applicable
for Tax
Relief

Tax Relief
on Interest

Tax
Relief on
Premium

Net Cash
Flow Out

@ x% Internal Rate of Return

Tax Relief at 52% p.a.

@ 14.5%

@14.4%

@14.345%

 

pv

pv

pv

pv

1

5472.88

4740.00

564.88

3200.00

1664.00

10.92

3797.96

3317.00

3319.90

3318.88

FV = P( 1 + i )n

= £40,000 ( 1.1185 )20

i.e. FV = £375,646.86

2

5472.88

4673.06

631.82

3200.00

1664.00

10.92

3797.96

2896.94

2902.01

2900.23

3

5472.88

4598.19

706.69

3200.00

1664.00

10.92

3797.96

2530.08

2536.72

2534.39

4

5472.88

4514.45

790.43

3200.00

1664.00

10.92

3797.96

2209.68

2217.41

2214.70

5

5472.88

4420.78

884.10

3200.00

1664.00

10.92

3797.96

1929.85

1938.30

1935.33

6

5472.88

4316.02

988.86

3200.00

1664.00

10.92

3797.96

1685.46

1694.32

1691.21

7

5472.88

4198.84

1106.04

3200.00

1664.00

10.92

3797.96

1472.01

1481.04

1477.88

8

5472.88

4067.77

1237.11

3200.00

1664.00

10.92

3797.96

1285.60

1294.62

1291.46

9

5472.88

3921.17

1383.71

3136.94

1631.21

10.92

3830.75

1132.49

1141.43

1138.29

10

5472.88

3757.20

1547.68

3005.76

1563.00

10.92

3898.96

1006.69

1015.52

1012.42

11

5472.88

3573.80

1731.08

2859.04

1486.70

10.92

3975.26

896.41

905.06

902.02

12

5472.88

3368.67

1936.21

2694.94

1401.37

10.92

4060.59

799.69

808.12

805.16

13

5472.88

3139.23

2165.65

2511.38

1305.92

10.92

4156.04

714.84

723.01

720.14

14

5472.88

2882.60

2422.28

2306.08

1199.16

10.92

4262.80

640.35

648.23

645.46

15

5472.88

2595.56

2709.32

2076.45

1079.75

10.92

4382.21

574.92

582.51

579.84

16

5472.88

2274.51

3030.37

1819.61

946.20

10.92

4515.76

517.42

524.70

522.14

17

5472.88

1915.41

3389.47

1532.33

796.81

10.92

4665.15

466.84

473.83

471.37

18

5472.88

1513.76

3791.12

1211.01

629.73

10.92

4832.23

422.33

429.02

426.67

19

5472.88

1064.51

4240.37

851.61

442.84

10.92

5019.12

383.11

389.52

387.27

20

5472.88

562.02

4742.86

449.62

233.80

10.92

5228.16

348.53

354.67

352.51

(Column F) Total

26,028.49

PV = ?pv

25,230.24

25,379.94

25,327.37

N.B.

Arithmetic Average (per month)

£108.45

yields FV 4

378,469.70

374,120.13

375,636.32

OK

 

Analysis Table 6

May 1991

Case 2: An 18 Year Repayment Mortgage

£40,000 Borrowed over 18 Years @ 11.85% p.a.

Analysis Table 6

A

B

C

D

E

F

G

H

I

J

K

L

Year

Gross Cash Flow Out

Interest Paid

Principal Repaid

Interest
Applicable
for Tax
Relief

Tax Relief
on Interest

Tax
Relief on
Premium

Net Cash
Flow Out

@ x% Internal Rate of Return

Tax Relief at 52% p.a.

@ 14.5%

@14.6%

@14.641%

pv

pv

pv

pv

1

5636.48

4740.00

728.48

3200.00

1664.00

10.92

3961.56

3459.88

3456.86

3455.62

 

FV = P( 1 + i )n

= £40,000 (1.1185)18

i.e. FV = £300,267.12

2

5636.48

4653.68

814.80

3200.00

1664.00

10.92

3961.56

3021.73

3016.46

3014.30

 

3

5636.48

4557.12

911.36

3200.00

1664.00

10.92

3961.56

2639.06

2632.16

2629.34

 

4

5636.48

4449.12

1019.36

3200.00

1664.00

10.92

3961.56

2304.86

2296.82

2293.54

 

5

5636.48

4328.33

1140.15

3200.00

1664.00

10.92

3961.56

2012.98

2004.21

2000.63

 

6

5636.48

4193.22

1275.26

3200.00

1664.00

10.92

3961.56

1758.06

1748.87

1745.12

 

7

5636.48

4042.11

1426.37

3200.00

1664.00

10.92

3961.56

1535.42

1526.07

1522.25

 

8

5636.48

3873.08

1595.40

3098.46

1611.20

10.92

4014.36

1358.85

1349.40

1345.54

 

9

5636.48

3684.03

1784.45

2947.22

1532.55

10.92

4093.01

1210.02

1200.55

1196.69

 

10

5636.48

3472.57

1995.91

2778.06

1444.59

10.92

4180.97

1079.50

1070.12

1066.30

 

11

5636.48

3236.05

2232.43

2588.84

1346.20

10.92

4279.36

964.98

955.76

952.00

 

12

5636.48

2971.51

2496.97

2377.21

1236.15

10.92

4389.41

864.45

855.44

851.78

 

13

5636.48

2675.62

2792.86

2140.50

1113.06

10.92

4512.50

776.15

767.39

763.83

 

14

5636.48

2344.66

3123.82

1875.73

975.38

10.92

4650.18

698.54

690.06

686.61

 

15

5636.48

1974.49

3493.99

1579.59

821.39

10.92

4804.17

630.28

622.08

618.76

 

16

5636.48

1560.45

3908.03

1248.36

649.15

10.92

4976.41

570.20

562.29

559.08

 

17

5636.48

1097.34

4371.13

877.87

456.49

10.92

5169.07

517.27

509.65

506.56

 

18

5636.48

579.37

4889.11

463.50

241.02

10.92

5384.54

470.60

463.26

460.29

 

PV = ?pv

25,872.83

25,727.45

25,668.24

yields FV

296,034.75

299,033.51

300,272.44

OK

 

Copyright © 2013, 2014 John O'Meara. All Rights Reserved.