Transform your daily workflows and Protect Amortization Schedule

Aug 6th, 2022
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How to Protect Amortization Schedule

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This video is provided as supplementary material for courses taught at Howard Community College and in this video Im going to show how to construct an amortization schedule. So imagine youve got a situation like this. You take out a loan for $15,000. Its at 4.5% compounded monthly and youve got monthly payments for 3 years. We have to make an amortization table for that situation. There are two steps we have to do before we can start filling in the table. The first thing is were going to use the present value formula and well figure out what the monthly payment will be. Ive already done that and given this this situation the monthly payment would be $446.20. The other thing we have to do is figure out the interest rate for each payment period. So what we do is take the annual interest rate, which is 4.5%, we turn that into a decimal -- .045, and then we want to divide that by the number of compounding periods each year. Since were making monthly payments, that would be 12. S

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Similar to what obtains for the depreciation of tangible assets, there are three primary methods of amortization: the straight-line method, the accelerated method, and the units-of-production method.
You can build your own amortization schedule and include an extra payment each year to see how much that will affect the amount of time it takes to pay off the loan and lower the interest charges.
A loan amortization schedule is a table that shows each periodic loan payment that is owed, typically monthly, for level-payment loans. The schedule breaks down how much of each payment is designated for the interest versus the principal.
The two main types of amortization schedules are fixed-rate and adjustable-rate. Fixed-rate amortization schedules are the most common and involve a fixed interest rate for the entire loan term. This means that the interest rate and monthly payments remain the same throughout the life of the loan.
Amortization Schedules: 5 Common Types of Amortization Full amortization with a fixed rate. Full amortization with a variable rate. Full amortization with deferred interest. Partial amortization with a balloon payment. Negative amortization.
Amortization Schedules: 5 Common Types of Amortization Full amortization with a fixed rate. Full amortization with a variable rate. Full amortization with deferred interest. Partial amortization with a balloon payment. Negative amortization.
The term amortization refers to two situations. First, amortization is used in the process of paying off debt through regular principal and interest payments over time. An amortization schedule is used to reduce the current balance on a loanfor example, a mortgage or a car loanthrough installment payments.
Amortization tables typically include a line for scheduled payments, interest expenses, and principal repayment.

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