Module 02 modeling assignment – loan amortization table
An amortization chart is used to calculate monthly payments for a loan. You will need the amount of your loan, the interest rate and the term to create an amortization chart. This company takes out a $1M loan over a period of three years, at 6%. This loan’s monthly repayment would be $11,385.58.
It shows information on each payment, including the amount of principal paid and the interest that was charged. The table also displays any remaining balance at each stage. In month 1, $5,000 is used to pay off the principal portion, while the remaining $973,614.42 goes toward the payment of interest.
As time progresses and more payments are made on both principal and interest portions of the debt obligation; then more money will go toward paying off principal than towards servicing just interest obligation – until eventually (at end of third year) all monies collected have been applied solely toward satisfying full balance owed which should now be zero or close to it by then.
An amortization table helps business owners stay organized while keeping track of their monthly obligations related to long-term financing instruments like loans – allowing them to make sure their lender’s contractual requirements are being met in timely fashion; thus helping maintain good credit rating with that lender or any other potential financiers they might seek out down road when seeking further funding opportunities such as expansion capital maybe?