## Minimum Yearly Repayment Calculation

**Given:**
- Principal (P) = $50,000
- Benchmark interest rate (r) = 8.77% = 0.0877
- Remaining term (n) = 7 years

**Formula:**
MYR = P × r / (1 − (1 + r)^−n)

**Calculation:**

MYR = 50,000 × 0.0877 / (1 − (1.0877)^−7)

First, calculate (1.0877)^−7:
- (1.0877)^7 = 1.808142...
- (1.0877)^−7 = 0.553109...

Then, 1 − 0.553109... = 0.446891...

Numerator: 50,000 × 0.0877 = 4,385

MYR = 4,385 / 0.446891... = **$9,811.79**

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**Minimum yearly repayment for the first year: $9,811.79**

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## Controlling Authority

The Division 7A minimum yearly repayment rule is established in **Division 7A of Part III of the Income Tax Assessment Act 1936 (Cth)** (ITAA 1936), specifically in **Subdivision D** (sections 109E to 109G). The benchmark interest rate is determined by the Commissioner of Taxation under **section 109E(2)** and published annually in a **Taxation Determination** (typically TD 2025/2 for the 2025-26 income year).