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In this video tutorial, the presenter demonstrates how to prepare an amortization schedule, which is an application of the present value of an annuity. Key terms are introduced, including "principal," the original loan amount, and "interest," the charge from the lender. The video focuses on amortized loans—where both principal and interest are paid in equal payments over time—while noting alternative payment schemes such as discount loans, where repayment occurs at maturity. The amortization schedule being created outlines annual interest expenses, reductions in principal each year, and the remaining principal balance for the amortized loan. The video proceeds to an exercise for practical application.