Financial Modelling - simple interest

Jonno1
Jonno1 Registered Posts: 63 Regular contributor ⭐
edited 12:14PM in AAT member discussion
I'm helping a colleague with some financial modelling of a project using Excel, for a loan there is a simple interest of 14% per annum. Then there is the phrase ' All gross revenues will be applied to loan principle first, then to the accrued loan interest'. What does this latter phrase mean?

Comments

  • Moominyak
    Moominyak Registered Posts: 38 Regular contributor ⭐
    It means that any payments made towards the loan will go towards the principal (ie. the actual amount borrowed) first, then towards the interest.

    HTH

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