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Control Number PA 03 78 Form

Control Number PA 03 78 Form

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We're gonna take a look at how principle and interest is applied in the amortization of a loan as payments are made over time. Amortization tables and now of course calculators and computers give us the exact amount of how much a payment needs to be to cover the interest and to pay the loan off at a steady rate so that the loan is fully paid of to zero on the very last payment. Each payment contains both principle and the interest that has accrued over that period. Let's take a look at an example. Let's say we have a $100,000 loan at 6% amortized over 30 years. Our payment amount is going to be 599.55 each month. 599 is our payment amount all the way to the life of the loan. Contained within that $599 is both the interest that accrued that month and also the amount of principle it's going to take to pay down the loan at the steady rate that we've determined. Let's take a look at how that payment is broken down with each payment. With the

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