Amortization_Schedule

Amortization Schedule

Amortization Schedule is the pay-down of your loan based on your loan amount,
interest rate, and the term of your loan.

To calculate the amortization schedule, take the full amount of your loan, multiplied by
the interest rate.
Then you take that number (the annual interest) and divide it by twelve (the number of
months in a year).
Take that number (the monthly interest) and subtract it from your monthly payment.
Take that number (the monthly principal) and subtract it from the loan amount. You will
get your loan balance.
Repeat these steps for each monthly payment, each time, starting with the loan balance
you got on that last step.
A 30 year loan is 360 payments.

Example:

Loan Amount: $500,000
Interest Rate: 6.5%
Term: 30 years
Total Monthly Payment: $3,160.34

Payment # 1
$500,000(Loan Amount) X 6.5%(Interest Rate) = $32,500(annual Interest)
$32, 500 / 12(months) = $2,708.33(Monthly Interest)
$3160.34(Monthly Payment) - $2,708.33 = $452.01(Monthly Principal)
$500,000 - $452.01 = $499,547.99(Loan Balance)

Payment # 2
$499,547.99 X 6.5% = $32,470.61
$32470.61 / 12 = $2,705.88
$3160.34 - $2,705.88 = $454.46
$499,547.99 - $454.46 = $499,093.53

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