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How to calculate the amortization schedule. i need help about this?

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Question added by Muhammad waseem , Import Export Manager , Softwood (pvt) ltd
Date Posted: 2016/08/20
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Eleanor Cariño
by 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.

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