![]() You will mostly be paying off the interest when you start making payments, and then your payments will start to go to the balance. ![]() However, the portion of the payment that is principal or interest will change. The dollar amount of the payment stays constant. Since amortization is a monthly calculation in this example, the term is stated in months, not years. The term of the loan is 360 months (30 years).To calculate amortization, you will convert the annual interest rate into a monthly rate. Your interest rate (6%) is the annual rate on the loan.If your loan has a balance outstanding of $100,000 (not counting any accrued interest), that is the principal. ![]() For example, say you are paying off a 30-year mortgage. ![]()
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