Question

Imagine that you are going to borrow money. You decide to double the amount that you want to borrow. Should you double the payment if you wish to keep the same amortization period? Justify your reasoning with examples

Answer 1

Yes, if we double the borrowed amount, we would have to double the principle
installment amount if we wish to keep the same amortisation period. The
interest amount also gets doubled in this case. Thus, the whole installment
amount would gets doubled if we double the borrowed amount and wish to
maintain the same amortisation period. Example:
Period/Year end	Principle	Interest (10%)	installment payment
0	100000
1	90000	10000	20000
2	80000	9000	19000
IF DOUBLE AMOUNT IS DECIDED:
Period/Year end	Principle	Interest (10%)	installment payment
0	200000
1	180000	20000	40000	Double of previous amount
2	160000	18000	38000	Double of previous amount