A €50,000 loan at 4% is repaid by one of three five-year contracts: (i) principal and all compounded interest at maturity; (ii) annual interest-only payments and principal at maturity; (iii) five equal annual principal instalments. Value the remaining principal component (bare ownership) and interest component (usufruct) at t = 3 using a 5% effective annual market rate, immediately after any payment due then. This is a cash-flow decomposition, not a legal appraisal.
- A.Value both components for each contract.