A Tedesco Systems of Amortization: The Case of Simple Interest

The Tedesco system of debt amortization have been discussed both in the Italian specialized literature, and in Brazil, where has been called German Method, assuming compound capitalization. Both approaches are characterized by the payment of interest at the beginning of the period, and constant installments. However, they have different ways of determining interest, amortization and installment. Recently, the German method has been developed in Brazil, for simple interest capitalization. We develop, in this article, the Tedesco Method for simple capitalization and compare it to the German Method to determine which of them is a better option for the financial institution providing the loan.