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Eleanor Cariño , Receptionist cum Accountant , Future College FZC
To calculate the amortization, you need to know the following information: principal amount, interest rate and amortization period.
The principal amount is the current loan balance outstanding ($100,000).
Your interest rate (6%) is the annual rate on the loan. To calculate amortization, you will convert the annual interest rate into a monthly rate.
The term of the loan is 360 months (30 years). Since amortization is a monthly calculation in this example, the term is stated in months, not years.
Your monthly payment is $599.95. The dollar amount of the payment stays constant. However, the portion of the payment that is principal or interest will change.