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Multiple Contracts: The Case of the German System of Amortization in Compound Interest
Escola de Pós-Graduação em Economia, Fundação Getulio Vargas, Rio de Janeiro, Brazil
Faculdade de Ciências Econômicas, Universidade do Estado do Rio de Janeiro, Rio de Janeiro, Brazil
- 1 Escola de Pós-Graduação em Economia, Fundação Getulio Vargas, Rio de Janeiro, Brazil
- 2 Faculdade de Ciências Econômicas, Universidade do Estado do Rio de Janeiro, Rio de Janeiro, Brazil
Theoretical Economics Letters·Volume 14 (2024)·Pages 1969–1984·Published 12 September 2024·DOI10.4236/tel.2024.145098
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Abstract
In what appears to be a pioneering contribution of De-Losso et al., the multiple contracts scheme has been implemented in several amortization methods, such as constant installments, constant amortization and American. This paper will address the multiple contracts schema to the German amortization method, in compound capitalization. Since this method has the payments of interest at the beginning of each period, some adaptations were required in the De-Losso proposition. Additionally, a comparison with the French system is also presented.
KeywordsAmortization SystemsMultiple Contracts SchemeCompound Interest CapitalizationGerman Amortization SystemFrench Amortization System
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