# How to calculate mortgage amortization

## How do you calculate amortized cost?

Amortization = (Bond Issue Price – Face Value) / Bond Term

For an annual reporting of a five-year bond, this would be five. If you calculate it monthly, divide the discount by 60 months. The amortized cost would be \$600 per year, or \$50 per month.

## How do you make an amortization schedule?

Loan Amortization Schedule

1. Use the PPMT function to calculate the principal part of the payment. …
2. Use the IPMT function to calculate the interest part of the payment. …
3. Update the balance.
4. Select the range A7:E7 (first payment) and drag it down one row. …
5. Select the range A8:E8 (second payment) and drag it down to row 30.

## How do you calculate monthly amortization on a home loan?

To compute for your monthly amortization, there are some information or data you have to have on hand:

1. Total Contract Price (TCP) of the property you are buying.
2. Loanable Amount. …
3. Down Payment (DP) or Equity required by the developer. …
4. Interest Rate (IR). …
5. Factor Rate which you can get from the following Factor Rate Table.

## What is an example of amortization?

Amortization is the practice of spreading an intangible asset’s cost over that asset’s useful life. Intangible assets are not physical assets, per se. Examples of intangible assets that are expensed through amortization might include: Patents and trademarks.

## Why do we amortize?

First, amortization is used in the process of paying off debt through regular principal and interest payments over time. An amortization schedule is used to reduce the current balance on a loan, for example a mortgage or car loan, through installment payments.

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## What are two types of amortization?

Straight-line and mortgage-style amortization are two types of loan repayment mechanisms.

• Straight-Line Amortization. The straight-line amortization calculation is a simple method of debt repayment. …
• Mortgage-Style Amortization. …

## Does Excel have an amortization schedule?

How to Create an Amortization Schedule in Excel

• Open Excel and select “Loan Amortization Schedule” from the template gallery. …
• Input your starting data. …
• With this information, Excel will automatically calculate the loan payments (Scheduled payment) through the end of the payment period.

## What are amortization expenses?

Amortization expense is the write-off of an intangible asset over its expected period of use, which reflects the consumption of the asset. … The accounting for amortization expense is a debit to the amortization expense account and a credit to the accumulated amortization account.7 мая 2017 г.

## What is the formula for diminishing interest rate?

In Diminishing Balance Interest Rate method, interest is calculated every month on the outstanding loan balance as reduced by the principal repayment every month. EMI payment every month contains interest payable for the outstanding loan amount for the month plus principal repayment.

## How do you calculate monthly payments?

Step 2: Understand the monthly payment formula for your loan type.

1. A = Total loan amount.
2. D = {[(1 + r)n] – 1} / [r(1 + r)n]
3. Periodic Interest Rate (r) = Annual rate (converted to decimal figure) divided by number of payment periods.
4. Number of Periodic Payments (n) = Payments per year multiplied by number of years.

## How do you calculate the interest rate?

Divide your interest rate by the number of payments you’ll make in the year (interest rates are expressed annually). So, for example, if you’re making monthly payments, divide by 12. 2. Multiply it by the balance of your loan, which for the first payment, will be your whole principal amount.

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## What is another word for amortization?

What is another word for amortization?paybackpaying backcashbountyexpensereparationdefraymentpay-offretaliationdefrayal