Financial Calculations Worksheet Page 21
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3019 - 4
Investment Appraisal
19-5 Amortization of a Loan
This calculator can be used to calculate the principal and interest portion of a
monthly installment, the remaining principal, and amount of principal and interest
repaid up to any point.
;;;;;
Amount of single payment
;;;;;
;;;;;
e
a
;;;;;
;;;;;
;;;;;
;;;;;
c
;;;;;
b
;;;;;
;;;;;
d
1 2
m
n
(Number of payments)
a
INT
: Interest portion of installment PM1 (
)
b
PRN
: Principal portion of installment PM1 (
)
c
BAL
: Balance of principal after installment PM2 (
)
d
PRN
: Total principal from installment PM1 to payment of installment PM2 (Σ
)
e
INT
: Total interest from installment PM1 to payment of installment PM2 (Σ
)
a
b
PMT
*
+
= one repayment (
)
× i I × (PMT sign)
a : INT
= I BAL
PM1
PM1–1
× i
b : PRN
= PMT + BAL
PM1
PM1–1
c : BAL
= BAL
+ PRN
PM2
PM2–1
PM2
Σ
PM2
d :
PRN = PRN
+ PRN
+ … + PRN
PM1
PM1+1
PM2
PM1
Σ
PM2
e :
INT = INT
+ INT
+ … + INT
PM1
PM1+1
PM2
PM1
BAL
PV
INT
PRN
PMT
=
(
= 0 and
=
at beginning of installment term)
0
1
1
u u u u u Converting between the nominal interest rate and effective interest
rate
I
The nominal interest rate (
% value input by user) is converted to an effective
I
interest rate (
%') for installment loans where the number of installments per year
is different from the number of compound interest calculation periods.
{
[C / Y ]
}
I%
[P / Y ]
×100
I%' =
(1+
)
–1
100 × [C / Y ]
341
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