Loan Payment Calculations
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What two numbers do you need to use an amortization chart?
Interest rate and term (15 years, 30 years, etc.)
How is the monthly principal and interest payment calculated using an amortization chart?
(Loan amount / $1,000) x factor from amortization chart
How is interest paid per month calculated?
(Principal x interest rate) / 12
How is the amount of a loan payment that's applied to principal calculated?
Monthly principal and interest payment - interest paid per month
How do you calculate total interest paid?
Monthly principal and interest payment x total number of payments — original loan amount
How do you calculate the new principal balance?
Original principal — amount of payment applied to principal
What is amortization?
Paying off a loan over time
