Personal Finance & Money Asked by bc888 on December 24, 2020
I’m working with this question: Seasonal Loan Amortization. I wondered if someone could elaborate how to calculate the principal and interest portions of the payments when they are paid. The article doesn’t quite take a deep dive into this topic.
The article takes care of calculating the payment, but not the payment’s breakdown into principal and interest parts. For instance in a normal loan of 100000 at 6% for 30 years would have a payment of 599.55 with 500 owed in interest for the first month and 99.55 owed for principal. The interest lowers and the principal increases as the loan progresses, always adding to the payment. I wondered how to calculate the principal and interest for each line-item in the amortization schedule for the Seasonal Mortgage.
One would expect to pay somewhat more interest for such a loan than a normal loan in which payments are made every period.
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