Glossary of Municipal Securities Terms

LEVEL DEBT SERVICE

debt service schedule in which the combined annual amount of principal and interest payments remains relatively constant over the life of the issue of bonds.

EXAMPLE:

    Level Debt Service Assumptions:
    Size of issue:        $10,000,000
    Interest rate:        7 percent
    Maturity of issue:  5 years      

Debt Service Schedule – change calculations

 Years

 Principal

 Interest

 Total*

 1

 $ 1,740,000

 $ 700,000

 $ 2,440,000

 2

    1,860,000

    578,200

    2,438,200

 3

    1,990,000

    448,000

    2,438,000

 4

    2,130,000

    308,700

    2,438,700

 5

    2,280,000

    159,600

    2,439,600

 Total

 $ 10,000,000

 $2,194,500

 $12,194,500

*Total of principal and interest remains substantially level throughout life of issue.

See: DEBT SERVICE. Compare: LEVEL PRINCIPAL.

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