. Better fruit. Fruit-culture. ipi6 Farm Loan Act, Etc. Continucti from last issue Amortization Plan of Repaying Loans It has been said that all loans are to be repaid on the anioiiization plan. This plan calls for a number of fixed annual or semi-annual payments, which include not only all interest and charges due the bank, but the principal as well. These payments are so calcu- lated as to the debt in a given number of \ears. After five years the borrower has the right on any in- terest date to make additional pay- ments on the principal in sums of .$25 or any nmltiple thereof, t
. Better fruit. Fruit-culture. ipi6 Farm Loan Act, Etc. Continucti from last issue Amortization Plan of Repaying Loans It has been said that all loans are to be repaid on the anioiiization plan. This plan calls for a number of fixed annual or semi-annual payments, which include not only all interest and charges due the bank, but the principal as well. These payments are so calcu- lated as to the debt in a given number of \ears. After five years the borrower has the right on any in- terest date to make additional pay- ments on the principal in sums of .$25 or any nmltiple thereof, thus discharg- ing the debt more quickly. The table given below illustiates how a loan of •$1,000 bearing interest at 5 per cent would be retired in twenty years by an annual payment of -$ A study of the columns shows how from year to year the interest is reduced and the proportion of the payment which goes to discharge the principal steadily in- creases. The final payment cancels the debt: Total Amount of ANXl^AL annual Interest at Paid on principal PERIODS payment 5 per cent principal still unpaid 1 .$ $ $ $ 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Toltil. ..$ ? Funds Available for Loans .\fter a Federal land bank has loaned on first mortgage $50,000, it can obtain permission from the F^arni Loan Board to issue $50,(100 in farm-loan bonds basetl on these mortgages, sell such bonds in the open market and use the money thus obtained to lend on other mortgages. T
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