Amortization Schedule Calculator
Understanding Amortization
An amortization schedule is a table that displays the principal and interest payments for a loan over its lifetime. For each payment period, it shows how much of the payment goes towards interest, how much goes towards the principal, and the remaining balance of the loan.
How it Works:
- Calculate Monthly Payment: The first step is to determine the fixed monthly payment amount. This is calculated using the loan principal, the annual interest rate, and the loan term. The formula for calculating the monthly payment (M) is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
- P = Principal loan amount
- i = Monthly interest rate (annual rate divided by 12)
- n = Total number of payments (loan term in years multiplied by 12)
- Distribute Payments: Each month, a portion of your fixed payment goes towards the interest accrued since the last payment, and the remainder reduces the principal balance.
- Interest Calculation: The interest paid each month is calculated on the remaining principal balance from the previous period. The formula is:
Interest Paid = Remaining Balance * Monthly Interest Rate (i)
- Principal Reduction: The amount of principal paid is the difference between the total monthly payment and the interest paid:
Principal Paid = Monthly Payment - Interest Paid
- Remaining Balance Update: The new remaining balance is the previous balance minus the principal paid in the current period.
- Iteration: This process repeats for every payment period until the loan is fully paid off.
Key Takeaways from an Amortization Schedule:
- Interest Over Time: You'll see how much total interest you pay over the life of the loan.
- Principal Reduction Pace: Early payments consist of a larger portion of interest, while later payments increasingly go towards principal.
- Loan Payoff: It confirms that the loan will be paid off by the end of the term with consistent payments.
function calculateAmortization() {
var principal = parseFloat(document.getElementById("loanAmount").value);
var annualRate = parseFloat(document.getElementById("annualInterestRate").value);
var termYears = parseFloat(document.getElementById("loanTermYears").value);
var resultDiv = document.getElementById("amortizationResult");
resultDiv.innerHTML = "; // Clear previous results
if (isNaN(principal) || isNaN(annualRate) || isNaN(termYears) || principal <= 0 || annualRate < 0 || termYears <= 0) {
resultDiv.innerHTML = "Please enter valid positive numbers for all fields.";
return;
}
var monthlyRate = (annualRate / 100) / 12;
var numberOfPayments = termYears * 12;
// Calculate monthly payment
var monthlyPayment = principal * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
if (isNaN(monthlyPayment) || !isFinite(monthlyPayment)) {
resultDiv.innerHTML = "Could not calculate monthly payment. Please check your input values.";
return;
}
var tableHTML = "
Amortization Schedule
";
tableHTML += "
Monthly Payment: $" + monthlyPayment.toFixed(2) + "";
tableHTML += "
";
tableHTML += "| Month | Interest Paid | Principal Paid | Remaining Balance |
|---|
";
var remainingBalance = principal;
var totalInterestPaid = 0;
var totalPrincipalPaid = 0;
for (var i = 1; i remainingBalance) {
principalForMonth = remainingBalance;
monthlyPayment = interestForMonth + principalForMonth; // Adjust monthly payment for final period
}
remainingBalance -= principalForMonth;
totalInterestPaid += interestForMonth;
totalPrincipalPaid += principalForMonth;
// Handle floating point inaccuracies for the last payment
if (i === numberOfPayments) {
remainingBalance = 0;
}
tableHTML += "";
tableHTML += "| " + i + " | ";
tableHTML += "$" + interestForMonth.toFixed(2) + " | ";
tableHTML += "$" + principalForMonth.toFixed(2) + " | ";
tableHTML += "$" + remainingBalance.toFixed(2) + " | ";
tableHTML += "
";
}
tableHTML += "
";
tableHTML += "
Total Interest Paid Over Life of Loan: $" + totalInterestPaid.toFixed(2) + "";
tableHTML += "
Total Principal Paid Over Life of Loan: $" + totalPrincipalPaid.toFixed(2) + "";
resultDiv.innerHTML = tableHTML;
}
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}
.calculator-title {
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}
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}
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}
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}
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}
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}
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