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how to use an amortization table to calculate principal and interest or pi amortization is the process of spreading out a loan amount into a series of fixed monthly payments the loan is paid off at the end of the payment schedule or loan term a fully amortized loan pays off both the principal meaning the amount borrowed and the lender's interest by the last payment on the loan a partially amortized loan pays off a portion of the amount borrowed only with a balloon payment required by the buyer at the end of the payment schedule or loan term an interest only loan is just what it sounds like interest only payments made to the lender with a balloon payment for the full principal borrowed at the end of the loan term this table is used to calculate the principal and interest payment or pi of a fully amortized loan this document will always be provided at your state exam for reference the factors do not change and you do not need to memorize them each of the factors shown here represent the...