I. The basic equation expressing the equivalence of drawdowns on the one hand and repayments and charges on the other.

The basic equation, which establishes the annual percentage rate of charge (APR), equates, on an annual basis, the total present value of drawdowns on the one hand and the total present value of repayments and payments of charges on the other hand, i.e.:

where:

• X is the APR,

• m is the number of the last drawdown,

• k is the number of a drawdown, thus 1 ≤ k ≤ m,

• Ck is the amount of drawdown k,

• tk is the interval, expressed in years and fractions of a year, between the date of the first drawdown and the date of each subsequent drawdown, thus t1 = 0,

• m' is the number of the last repayment or payment of charges,

• l is the number of a repayment or payment of charges,

• Dl is the amount of a repayment or payment of charges,