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Classic Financial II manual · Chapter 7 of 16

Loan amortization (AMORT)

See the balance, principal and interest for any span of payments of a loan.

7.1Open the schedule for a loan#

First solve or enter the loan in the TVM keys. Then press 2NDAMORTPV (AMORT). Set P1 (the first payment of the span) and P2 (the last) and the sheet shows the balance after P2 (BAL), the principal paid (PRN) and the interest paid (INT) over that span. Principal and interest are negative because they are payments.

PMT=−(principal+interest),interestk=i×balancek−1PMT = -\left(\text{principal} + \text{interest}\right),\qquad \text{interest}_k = i \times \text{balance}_{k-1}
Each payment covers interest on the balance plus some principal.
  1. TVM values
  2. 2NDAMORTPV
  3. P1 = 1 ENTER
  4. P2 = 12 ENTER
  5. ↓ BAL, PRN, INT
Reading one year of a loan.
The AMORT worksheet opens at P1. The display shows: P1= 1.00.
The AMORT worksheet opens at P1.
Example 7.1

Balance after the first year

  1. Compute the payment, open AMORT, set P1 = 1 and P2 = 12, then press down to BAL.

    2NDP/YI/Y12ENTER2NDQUITCPT360N6I/Y200000PV0FVCPTPMT2NDAMORTPV1ENTER↓12ENTER↓
Result of the example "Balance after the first year" The display shows: BAL= 197,543.99.
You should seeBAL= 197,543.99
Example 7.2

Principal paid in year one

  1. Press down once more for PRN.

    2NDP/YI/Y12ENTER2NDQUITCPT360N6I/Y200000PV0FVCPTPMT2NDAMORTPV1ENTER↓12ENTER↓↓
Result of the example "Principal paid in year one" The display shows: PRN= -2,456.01.
You should seePRN= -2,456.01
Example 7.3

Interest paid in year one

  1. And once more for INT.

    2NDP/YI/Y12ENTER2NDQUITCPT360N6I/Y200000PV0FVCPTPMT2NDAMORTPV1ENTER↓12ENTER↓↓↓
Result of the example "Interest paid in year one" The display shows: INT= -11,933.19.
You should seeINT= -11,933.19

See also See how much of a payment is interest

7.2Step to the next block of payments#

With P1 or P2 selected, press CPT to move on: P1 becomes the payment after P2, and P2 moves ahead by the same span.

Example 7.4

Second year

  1. After setting year one, compute P1 to move on, then press down to P2.

    2NDP/YI/Y12ENTER2NDQUITCPT360N6I/Y200000PV0FVCPTPMT2NDAMORTPV1ENTER↓12ENTERCPT
Result of the example "Second year" The display shows: P2= 24.00.
You should seeP2= 24.00
Example 7.5

Balance after year two

  1. Press down for the balance after payment 24.

    2NDP/YI/Y12ENTER2NDQUITCPT360N6I/Y200000PV0FVCPTPMT2NDAMORTPV1ENTER↓12ENTERCPT↓
Result of the example "Balance after year two" The display shows: BAL= 194,936.50.
You should seeBAL= 194,936.50
Example 7.6

One payment only

  1. Without changing P1 and P2, one payment: balance after payment 1.

    2NDP/YI/Y12ENTER2NDQUITCPT360N6I/Y200000PV0FVCPTPMT2NDAMORTPV↓↓
Result of the example "One payment only" The display shows: BAL= 199,800.90.
You should seeBAL= 199,800.90

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