Abstract
Repeatedly, the Brazilian Judicial System has determined that home-financing contracts written in terms of compound interest, both in the case of constant payments and in the case of the system of constant amortization, should be substituted by contracts specifying simple interest. This has resulted, for the case of the system of constant
mortization, in the adoption of a variant of a procedure that has been named the “Gauss’ Method”. It is shown that the implementation of a multiple contracts’ version
may imply substantial fiscal gains, depending on the financial institution opportunity cost.
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