Down Scaling Interest in Interest Rate - Theoretical Economics Letters

TEL > Vol.5 No.1, February 2015

Down Scaling Interest in Interest Rate ()

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DOI: 10.4236/tel.2015.51012 3,079 Downloads 4,242 Views Citations

Author(s)

Mohammed H. S. Al Ashry^1,2

Affiliation(s)

¹Department of Computer Science, the Community College, Shaqra University, Shaqra, Saudi Arabia.
²Department of Computer Science, the College of Sciences and Humanities, Shaqra University, Shaqra, Saudi Arabia.

ABSTRACT

During periods of high interest rates, businesses utilize their own capital, merge with other businesses, or diversify, and borrow when it is absolutely necessary. People also avoid hardship through refinancing during economic slowdowns because interest rates are low enough to recover some of their income and lower debt interest. High interest rates are more inviting to investments although hard to sustain in the long run. The future looks grim and interest rates have been down for a while, and will probably stay down for some time to come. This paper investigates ways to lower the earnings percentage in interest rates. A new set of the uniform series of the future worth of money involving linear gradients will be mathematically reformulated to investigate the possibility of lowering the interest rate for long term loans and mortgages. A new equation will be formulated and put into a tabulated practical example.

KEYWORDS

Downscaling: Reducing, Rationalizing and Economizing, Mortgage: A Property Loan, Usually Based on the Value of the Property, Future Value of Money: Value of the Loan or Mortgage with Interest, If Payments Are Timely Made in Full, Present Worth of Money: Amount of the Loan, Mortgage, Compounding: In Finance, Combining Multiples of Payments and Interests

Share and Cite:

Ashry, M. (2015) Down Scaling Interest in Interest Rate. Theoretical Economics Letters, 5, 82-91. doi: 10.4236/tel.2015.51012.

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