**Posted on:**30th Mar, 2004 05:02 am

**Amortization Schedule**is a schedule prepared for the payment of a mortgage loan. It is a detailed timetable showing-

- The beginning principal amount.

- Period payments.

- Amount of each interest and principal payment.

- The remaining last balance.

**For example,**Shawn has taken a loan of $ 50,000 at an interest of 7.5% per annum for the period of 1 years and 3 months. So, his monthly installment comes to $ 3502.42.

Payment No. | Date | Principal Paid | Interest Paid | Amount Balance |

01. | 2005-08-01 | 3189.92 | 312.50 | 46497.58 |

02. | 2005-09-01 | 3211.81 | 290.61 | 42995.15 |

03. | 2005-10-01 | 3233.70 | 268.72 | 39492.72 |

04. | 2005-11-01 | 3255.59 | 246.83 | 35990.31 |

05. | 2005-12-01 | 3277.48 | 224.94 | 32487.89 |

06. | 2006-01-01 | 3299.37 | 203.05 | 28985.46 |

07. | 2006-02-01 | 3321.26 | 181.16 | 25483.04 |

08. | 2006-03-01 | 3343.15 | 159.27 | 21980.62 |

09. | 2006-04-01 | 3365.04 | 137.38 | 18478.20 |

10. | 2006-05-01 | 3386.93 | 115.49 | 14975.77 |

11. | 2006-06-01 | 3408.82 | 93.60 | 11473.35 |

12. | 2006-07-01 | 3430.71 | 71.71 | 7970.93 |

13. | 2006-08-01 | 3452.60 | 49.82 | 4468.51 |

14. | 2006-09-01 | 3474.49 | 27.93 | 966.08 |

15. | 2006-10-01 | 3496.38 | 6.04 | Paid |

### Interest rate:

Interest can be defined as an additional charge on the principal amount of the loan. Interest rate is expressed as the percentage of the total mortgage loan amount.

### Principal payment:

Principal is the original loan amount specified in the mortgage deal. The amount of the mortgage loan that a borrower takes out is called the principal amount. The borrower has to repay that amount.

### Total monthly payment:

Generally, you repay the loan that you have taken out on a monthly basis. You pay a part of the principal amount along with the interest amount on a monthly basis. In other words, total monthly payment amount is the sum of the principal payment and the interest payment amount.

### Remaining principal balance:

A principal balance is the amount outstanding on a loan that needs to be repaid to the lender. It does not take into account future interest or fees that will accrue.

Calculate it yourself

Hi Jeanne,

The annual interest rate is calculated by considering the factors given in http://www.mortgagefit.com/rate-calculated.html .

Thanks,

Sara.

The annual interest rate is calculated by considering the factors given in http://www.mortgagefit.com/rate-calculated.html .

Thanks,

Sara.

Hi Jeanne,

The annual interest on a loan is calculated compoundly.

To calculate the amount, always we are applying the formula

"A=P(1+r/n)^nt"

Where,

P = Principal

r = rate of interest

n = Number of times the interest is compounded per year.

t = loan term

Thanks

The annual interest on a loan is calculated compoundly.

To calculate the amount, always we are applying the formula

"A=P(1+r/n)^nt"

Where,

P = Principal

r = rate of interest

n = Number of times the interest is compounded per year.

t = loan term

Thanks