math
amortization schedule
An amortization schedule is a table showing each payment on a fully amortized loan, broken into the portion applied to interest and the portion applied to principal, along with the remaining balance after each payment. With a fixed-rate loan the payment stays the same, but early payments are mostly interest; as the balance falls, more of each payment goes to principal. Interest for each month is the balance times the annual rate divided by 12.
- Exam tip
- Monthly interest = balance x annual rate / 12; principal paid = payment minus interest. Exams often ask for the balance after the first payment.
- Example
- On a $200,000 loan at 6% with a $1,199 payment, month one interest is $1,000, principal is $199, and the new balance is $199,801.
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Last verified: 2026-10-23