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Financial calculators and cash flows · Amortization
Amortization. Each payment first covers the period's interest on the balance; the rest repays principal.
Amortization
Mathematical examples based on your inputs; taxes, fees and market forecasts are not included.
Results are for study and planning. Check decisions about real money with a qualified professional.
Money you receive is positive, money you pay is negative. For a loan you take: PV +, PMT −.
Your calculation
- Balance
- 0.04
- Total interest
- -327.96
| Pmt | Payment per period | Interest | Principal | Balance |
|---|---|---|---|---|
| 1 | -860.66 | -50 | -810.66 | 9,189.34 |
| 2 | -860.66 | -45.95 | -814.71 | 8,374.63 |
| 3 | -860.66 | -41.87 | -818.79 | 7,555.84 |
| 4 | -860.66 | -37.78 | -822.88 | 6,732.96 |
| 5 | -860.66 | -33.66 | -827 | 5,905.96 |
| 6 | -860.66 | -29.53 | -831.13 | 5,074.83 |
| 7 | -860.66 | -25.37 | -835.29 | 4,239.54 |
| 8 | -860.66 | -21.2 | -839.46 | 3,400.08 |
| 9 | -860.66 | -17 | -843.66 | 2,556.42 |
| 10 | -860.66 | -12.78 | -847.88 | 1,708.54 |
| 11 | -860.66 | -8.54 | -852.12 | 856.42 |
| 12 | -860.66 | -4.28 | -856.38 | 0.04 |
How the calculation works
Each payment first covers the period's interest on the balance; the rest repays principal.
A worked example
- Nominal annual rate (%)
- 6
- Periods
- 12
- Present value
- 10,000
- Payment per period
- -860.6642970708
- Payments per year
- 12
- Compounding per year
- 12
Step by step
- r = Nominal annual rate (%) ÷ Payments per year = 6 % ÷ 12 = 0.5 %
- Period 1: Interest = 10,000 × 0.5 % = 50 · 860.66 − 50 = 810.66 → 9,189.34
- Period 2: Interest = 9,189.34 × 0.5 % = 45.95 · 860.66 − 45.95 = 814.71 → 8,374.63
- Period 12: Interest = 856.42 × 0.5 % = 4.28 · 860.66 − 4.28 = 856.38 → 0.04
- Total interest = -327.96 · Balance = 0.04
Enter the loan as a positive present value and the payment as a negative number. A payment rounded to cents can leave a small balance in the last row.
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