- Nov 12, 2007
- 11,250
- 17,554
Think you’ve got your maths a bit wrong there mate- 5 years of 5% interest in a 400m loan would be £100m just on the interest, not £52m (5% of 400m is 20m per annum).
but you are paying down the principal from day one. so for year two for example the interest is computed on around 380 million and it goes down faster in later years. in year 5 you'd have less than 100 million of loan and interest would be very small.