Amortization

 Been trying to make clear - in my own mind - how paymentamounts for 

amortized loans are calculated. Found the formula on the web:

'Total payment' here is the amount the borrower pays back at each agreed upon

due date.

Let's look at the simplest case possible. I borrow 100$ at 10% for two years.

What is the repayment amount I will be making (there will be tow).

Plugging my numbers in the formula, I end up making two payments of

57.62$. On the first payment, 10$ is going to yearly interest. So I have reduced

the principal I owe by 47.62. which means i enter year two owing 52.38$. That

too is going to cost me 10% over the year. So my second payment covers the 52.38$

plus 5.24$ interest. There it is: 57.62$.

It's actually a lovely formula; (1+i)^n/((1+i)^n)-1... multiplied by ...(i x loaned amount)

makes for a payments amount that is a multiple of interest units.

(Someone with a mortgage may have a slightly higher payment than the formula would

dictate. This would be due to an insurance premium being included.)

And indeed, this is not the only possible repayment model.

https://www.investopedia.com/terms/a/amortization.asp#:~:text=How%20to%20Calculate%20Amortization%20of%20Loans&text=You'll%20need%20to%20divide,your%20loan%20term%20by%2012.

Amortization Calculation Formula and Payment Calculator (vertex42.com)

https://www.capital.fr/votre-argent/amortissement-dun-pret-definition-calcul-et-types-1430663#:~:text=L'amortissement%20d'un%20pr%C3%AAt%20correspond%20%C3%A0%20la%20dur%C3%A9e%20n%C3%A9cessaire,agit%20d'un%20pr%C3%AAt%20immobilier.