Amortization

__Financial Mode__

Amortization is the process of dividing a payment into the amount that applies to interest and the amount that applies to principal. Payment near the beginning of a loan contribute more interest, and less principal, than the payments near the end of a loan.

The 'Amort' key, allows to calculate :

- The amount applied to interest in a range of payments.
- The amount applied to principal in a range of payments.
- The amount still owned after a specific number of payments are made.

The 'Amort' button works only if you had already keyed the necessary values in the financial registers.

To Amortize payments, enter the start period number, press 'Enter', the end period number and press 'Amort'. MyCalc2 displays in the secondary display :

- The start period.
- The end period.
- The Balance after the last payment.
- The interest payed during the period.
- The principal payed during the period.

To amortize a single payment enter the period number, 'Enter', the period number again and press 'Amort'.

Example : Amortizing a range of payments.

You are buying a new house with a 15 years loan at 5 % annual nominal interest, compounded monthly. The price of the house is $ 350000.

Calculate the first six months of the amortization schedule.

You key the value this way and click on the 'Payment' button :

Next, amortize the first 6 months :

'1' 'Enter' '6' 'Amort' :

The secondary display shows :

Bal : 342061.04

Int : -8667.70

Prin : -7938.96

This means that

- The loan balance after 6 months is $ 342061.04.
- The interest paid is -8667.70.
- The principal paid is -7938.96.

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