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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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