Create,Amortization,Schedule,a finance, share, loan Create An Amortization Schedule


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An amortization schedule, in general, is a record of loan or mortgage payments. This record includes the payment number, date, amount, breakdown of principal and interest and the remaining balance owed after the payment. Here is an example on how an amortization schedule is calculated.Let\'s say a person has been loaned $10,000 from a lender. The annual interest rate (AIR) is 12% with a payment of $350 each month to the lender. Twelve percent per year is one percent per month. The lender gives him the $10,000 on June 15th - the advance date; and one month later (July 15th), the first monthly payment is due.The lender multiplies the monthly interest factor times the outstanding balance and the interest owed for the first month is $100.00 (.12 x 10,000/12), which is done at the end of the month. $250 of the monthly payment is applied towards the principal and the balance owed to the Lender. This is done immediately after the borrower gives the lender the $350 payment and balanced owed is $9,750.00. The interest for the borrowed money is calculated and taken first whenever any payment is made. The remaining amount goes towards reducing the principal. A negative amortization schedule is produced and the principal owing starts to increase if the payment doesn\'t to cover the interest. The interest shortfall is added to the balance.The next monthly payment is due on August 15th, the balance owed is $9,750 and the interest owed for the use of the money for the second month is 0.01 x 9,750 = 97.50. $252.50, hence, is applied against the loan or mortgage. The balance owing immediately after that second payment is $9,497.50. Article Tags: Amortization Schedule, Balance Owed, Monthly Payment

Create,Amortization,Schedule,a

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