Example of Loan Amortization Schedule

Example of Loan Amortization Schedule - For the second...

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Ok lets say  you owe a $100 and you have payments of $40 at 10%. Initially, you have to pay $10 interest on your loan payment.  The rest of the payment will  go to the principal ($40 - $10 = $30 to the principal)  so after the first payment, your loan schedule will look like this: Principal           Principal     Balance              Interest        $100    -          $30        =       $70                    $10
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Unformatted text preview: For the second payment, The interest is on the remaining balance ($70 x .1= $7). $40 - $7 = $33 towards the principal. 70 - $33 = $37 Balance $7 interest For the third payment, the interest is $37 x .1 = $3.70 So, $40 - $3.70= $36.30 goes to the principal . .. and technically, you still owe $.70. $ 37 - $3.70 = $36.30 toward the principal and you still owe $.70....
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This note was uploaded on 04/09/2010 for the course ACC 423 acc 423 taught by Professor Mr.youknowwho during the Spring '10 term at University of Phoenix.

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