Definition of Loan Amortization Schedule
When a person takes a loan for buying a house the bank offers the borrower a payment plan that lays all the upcoming payments of the loan that includes principal and interest amounts. The monthly installment is calculated using the following formula.
Assume a house is worth currently $50,000 the yearly installment will be as follows.
The amortization schedule for this will be as follow:
|
Period |
Installment |
Interest (7%) |
Principal Paid |
Principal Remaining |
|
0 |
- |
- |
- |
50,000.00 |
|
1 |
7,118.87 |
3,500.00 |
3,618.87 |
46,381.13 |
|
2 |
7,118.87 |
3,246.68 |
3,872.19 |
42,508.94 |
|
3 |
7,118.87 |
2,975.63 |
4,143.24 |
38,365.69 |
|
4 |
7,118.87 |
2,685.60 |
4,433.27 |
33,932.42 |
|
5 |
7,118.87 |
2,375.27 |
4,743.60 |
29,188.82 |
|
6 |
7,118.87 |
2,043.22 |
5,075.65 |
24,113.17 |
|
7 |
7,118.87 |
1,687.92 |
5,430.95 |
18,682.22 |
|
8 |
7,118.87 |
1,307.76 |
5,811.11 |
12,871.11 |
|
9 |
7,118.87 |
900.98 |
6,217.89 |
6,653.22 |
|
10 |
7,118.87 |
465.73 |
6,653.22 |
0.00 |
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