![]() While often used for mortgage-related purposes, an amortization calculator can also be used to analyze other debt, including short-term loans, student loans and credit cards. One can rearrange the formula to solve for any one term, except for i, for which one can use a root-finding algorithm.Ī = P i ( 1 + i ) n ( 1 + i ) n − 1 = P i × ( 1 + i ) n ( 1 + i ) n − 1 × ( 1 + i ) − n ( 1 + i ) − n = P × i 1 − ( 1 + i ) − n Other uses While normally used to solve for A, (the payment, given the terms) it can be used to solve for any single variable in the equation provided that all other variables are known. The calculation used to arrive at the periodic payment amount assumes that the first payment is not due on the first day of the loan, but rather one full payment period into the loan. The amortization schedule is a table delineating these figures across the duration of the loan in chronological order. An amortization calculator can also reveal the exact dollar amount that goes towards interest and the exact dollar amount that goes towards principal out of each individual payment. The amortization repayment model factors varying amounts of both interest and principal into every installment, though the total amount of each payment is the same.Īn amortization schedule calculator is often used to adjust the loan amount until the monthly payments will fit comfortably into budget, and can vary the interest rate to see the difference a better rate might make in the kind of home or car one can afford.
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