Bond
Period Fluctuation Calculator
This calculator determines the saving in interest over
the bond period as a result of opting for a shorter bond period than the
standard 20 year period. It can also be used to calculate the difference
in interest between a 20 year and 30 year bond.
In effect a shorter bond period would result in a higher
monthly bond repayment and this calculator therefore is a lot similar
to the increased installment calculator. The only difference is that with
the increased installment calculator an additional monthly bond repayment
is specified while this calculators uses the shorter bond period.
As is the case with the increased installment calculator,
the interest saving is earned over the entire bond period and therefore
does not represent a saving in present value terms. An average inflation
rate is therefore used to discount this saving to its present value and
an effective investment return is calculated. This percentage represents
the annual saving from investing an additional annuity amount into the
bond and is reflected before taking the effect of inflation into account. |
