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  • Amortization

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    Amortization is paying off a loan amount over time through planned incremental payments of principal and interest. Using a finance app on a class pad, a $400,000 loan taken at 6% interest compounded monthly over 30 years was calculated to have monthly payments of $2,398.20. After making 8 monthly payments, the balance would be $396,758.07, with $15,943.69 of interest accrued and $3,241.93 paid toward principal.

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    Amortization is paying off a loan amount over time through planned incremental payments of principal and interest. Using a finance app on a class pad, a $400,000 loan taken at 6% interest compounded monthly over 30 years was calculated to have monthly payments of $2,398.20. After making 8 monthly payments, the balance would be $396,758.07, with $15,943.69 of interest accrued and $3,241.93 paid toward principal.

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    © All Rights Reserved
    Baixe no formato PPTX, PDF, TXT ou leia online no Scribd
    Sinalizar o conteúdo como inadequado
    18 visualizações7 páginas

    Amortization

    Enviado por

    api-315354740
    Amortization is paying off a loan amount over time through planned incremental payments of principal and interest. Using a finance app on a class pad, a $400,000 loan taken at 6% interest compounded monthly over 30 years was calculated to have monthly payments of $2,398.20. After making 8 monthly payments, the balance would be $396,758.07, with $15,943.69 of interest accrued and $3,241.93 paid toward principal.

    Direitos autorais:

    © All Rights Reserved
    Baixe no formato PPTX, PDF, TXT ou leia online no Scribd
    Sinalizar o conteúdo como inadequado
    de 7

    Amortization (or amortisation) is paying off an amount owed over time by making

    planned, incremental payments of principal and interest. To amortize a loan means "to
    pay it off.
    Using the Finance App on the Class Pad
    Financial App on Class Pad
    Suppose you wish to determine the size of the repayments on a loan of $400 000 taken out on 1st January
    2017, for which the interest rate is 6% p.a. compounded monthly and the term of the loan is for 30 years.

    Enter the information into the Financial App of your Class Pad to determine the monthly payments (PMT)

    PMT: -2398.202101
    Using the Amortization option you can carry out some what if exercises, enter the information, now
    including the PMT value previously calculated
    Determine how much is owed after 8 instalments (8 months) have been paid. i.e. the balance at the end
    of August 2017

    Balance is $ 396758.0739
    Determine how much interest has accrued for the first 8 months

    Total Interest in this time period is $15943.69072


    Determine how much has been paid off principal within the first 8 months

    $3241.926083 has been paid off the principal

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