Steps to Amortizing

Lesson 6 of 11 • 0 upvotes • 5:26mins

Rakesh Sud

Time Value of Money-Amortizing. Steps to Amortization are:- 1. Calculate the payment per period. 2. Determine the interest in Period t. (Loan Balance at t-1) x (i% / m) 3. Compute principal payment in Period t. (Payment - Interest from Step 2) 4. Determine ending balance in Period t. (Balance - principal payment from Step 3) 5. Start again at Step 2 and repeat.