Picture this scenario.  X has 50K in a SACCO.. She borrows 650K from Y and now has 700K that she uses as collateral to a get 2.1M loan that she will repay for 7 years at 13% P.A in reducing balance. X repays the loan for 33 months straight until X takes over the loan and repays it using the income she generates from the houses shes building. At this time X and Y ask the bank to restructure the loan by defecting their collateral amount as part of the payment. Y then asks X to repay him all the amounts he has spent on her loan after the 7 years My questions are

1. How much money will X give to Y. Give me a breakdown and an explanation 

2. How much money will X have used to pay back the loan

3. How much  money will X have used back to pay the loan minus the money given back to Y

How much does X or Y 

To address your scenario comprehensively, we need to perform several calculations based on the given information. Let's break it down step-by-step:

### 1. Breakdown of Money to be Repaid to Y
Y lent X 650,000, which X used as part of collateral for the 2.1M loan. X repaid the loan for 33 months before asking Y to restructure the loan by defecting the collateral amount. After the 7 years, Y wants X to repay all the amounts he spent on her loan.

Let's calculate the total amount Y spent on the loan:
- **Loan Amount Borrowed by X from Y**: 650,000.

We need additional information to calculate what Y spent on the loan in terms of any payments made by Y. However, based on your statement, it seems Y simply wants his initial loan amount back. Therefore:

- **Amount to be Repaid to Y**: 650,000.

### 2. Total Amount Used by X to Pay Back the Loan
X took a 2.1M loan at 13% p.a. interest on a reducing balance. We need to calculate the monthly repayment and total payment over 33 months, and then for the rest of the period until restructuring. 

**Calculating Monthly Repayment**:

The formula for monthly repayment under reducing balance is:
\[
EMI = P \times \frac{r(1 + r)^n}{(1 + r)^n - 1}
\]
where:
- \( P = 2,100,000 \) (Principal amount)
- \( r = \frac{13}{12 \times 100} = 0.010833 \) (monthly interest rate)
- \( n = 84 \) months (loan duration)

Plugging in these values, we can find the monthly EMI.

Next, we calculate the total payments made over 33 months, then use the remaining balance to find the total payments until restructuring.

**Restructuring Impact**:

After 33 months, X asks to use the collateral amount as part of the payment, reducing the outstanding balance. We'll factor this in to get the exact amounts.

### 3. Total Money Used Minus the Money Given to Y

From the total payment in (2), we subtract the 650,000 to find the net cost to X.

**Let's compute these values now.**### 1. Amount X Will Give to Y
X owes Y the amount initially lent, which is:
- **Amount to be Repaid to Y**: 650,000.

### 2. Total Amount Used by X to Pay Back the Loan
- **Monthly EMI Payment**: 38,203.12.
- **Total Amount Paid in the First 33 Months**: 1,260,703.06.
- **Outstanding Balance After 33 Months**: 1,490,902.95.
- **Total Amount Paid Over 7 Years**: 3,209,062.33.

### 3. Total Money Used by X to Pay Back the Loan Minus the Amount Given to Y
- **Net Payment by X (Total Paid - Amount Repaid to Y)**: 2,559,062.33.

### Summary:
- **X owes Y**: 650,000.
- **X has paid on the loan**: 3,209,062.33.
- **Net cost to X**: 2,559,062.33 (after repaying Y).

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Do you have any more questions or need further details on any of these calculations?

### Related Questions:
1. What would have been the total payment if X hadn't restructured the loan?
2. How much would the total interest paid by X over the 7 years be?
3. What would be the impact on monthly payments if the interest rate was lower?
4. How would the overall cost change if X repaid the loan in 5 years instead of 7?
5. What is the breakdown of principal vs. interest payments over the first 33 months?

**Tip:** Always consider the impact of early repayment or restructuring on the overall cost of a loan.

Picture this scenario. X has 50K in a SACCO. She borrows 650K from Y and now has 700K that she uses as collateral to get a 2.1M loan that she will repay for 7 years at 13% P.A in reducing balance. X repays the loan for 33 months straight until X takes over the loan and repays it using the income she generates from the houses she's building. At this time X and Y ask the bank to restructure the loan by defecting their collateral amount as part of the payment. Y then asks X to repay him all the amounts he has spent on her loan after the 7 years. My questions are:

1. How much money will X give to Y? Give me a breakdown and an explanation.
2. How much money will X have used to pay back the loan?
3. How much money will X have used to pay back the loan minus the money given back to Y?

Analyze a complex loan repayment scenario involving a 2.1M loan at 13% interest on a reducing balance. Learn how to calculate the total loan repayment, restructure the loan using collateral, and determine how much X owes Y after 7 years. This step-by-step guide covers essential finance concepts like EMI calculation and collateral application.

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