Calculate detailed payment schedules for loans with complete amortization tables showing principal, interest, and remaining balance for each payment period.
Amortization is the process of paying off debt through regular payments over time. Each payment covers both interest and principal, with the proportion changing over the life of the loan. Early payments consist mostly of interest, while later payments apply more toward the principal balance.
An amortization schedule provides a detailed breakdown of each payment, showing exactly how much goes toward principal and interest, plus the remaining balance after each payment. This powerful tool helps borrowers understand the true cost of borrowing and plan their finances accordingly.
Where: PMT = Payment, P = Principal, r = Periodic interest rate, n = Number of payments
| Payment Period | Interest Portion | Principal Portion | Remaining Balance |
|---|---|---|---|
| Early Payments | High (70-90%) | Low (10-30%) | Decreases slowly |
| Middle Payments | Moderate (30-70%) | Moderate (30-70%) | Decreases steadily |
| Late Payments | Low (10-30%) | High (70-90%) | Decreases rapidly |
| Frequency | Payments per Year | Interest Savings | Time Savings |
|---|---|---|---|
| Monthly | 12 | Base amount | Full term |
| Bi-weekly | 26 | 15-20% less | 4-6 years less |
| Weekly | 52 | 20-25% less | 6-8 years less |
| Quarterly | 4 | 5-10% more | 1-2 years more |
Payment Planning: Know exactly what you'll pay each month and when the loan will be paid off
Interest Awareness: See how much interest you'll pay over the life of the loan
Refinancing Decisions: Compare current loan costs with potential new loan terms
Extra Payment Impact: Calculate savings from additional principal payments
Balance reaches zero at the end of the term
Principal payments begin after interest-only period
Remaining balance due at loan maturity
| Column | Shows | Key Insights |
|---|---|---|
| Payment Number | Sequential payment count | Track progress through loan term |
| Payment Amount | Total payment due | Usually constant for fixed-rate loans |
| Principal | Amount reducing loan balance | Increases over time |
| Interest | Cost of borrowing | Decreases over time |
| Balance | Remaining amount owed | Decreases to zero |
| $200,000 Loan, 30 Years | 4% Interest | 6% Interest | 8% Interest |
|---|---|---|---|
| Monthly Payment | $955 | $1,199 | $1,468 |
| Total Interest | $143,739 | $231,609 | $328,309 |
| Total Payments | $343,739 | $431,609 | $528,309 |
Intangible Assets: Patents, copyrights, goodwill amortized over useful life
Loan Origination Costs: Fees spread over loan term for accounting purposes
Software Development: Costs amortized over expected useful life
Leasehold Improvements: Amortized over lease term or useful life, whichever is shorter
Credit Cards: Revolving credit with variable payment amounts
Lines of Credit: Interest-only payments on outstanding balance
Adjustable Rate Loans: Payment amounts change with interest rate
Construction Loans: Interest-only during construction phase