The repayment of financial debt: some mathematical considerations

Abstract

This paper focuses on the mathematics behind the repayment of financial debt. The availability of credit, the inevitable accompaniment of which is debt, is an essential component of a monetised economy. Without it most people would not be able to purchase large items like homes, cars and other expensive consumer durables. Businesses would not expand and prosper without access to credit. However, the debt incurred by the availability of credit can also bring huge stress, and indeed distress, from personal and commercial insolvencies to the inhumanities of debt bondage associated with modern-day slavery and human trafficking. The historical origins of debt lie in antiquity and even pre-date the existence of monetised economies [1].