Section 3.2 Annuity BasicsComplete Amortization Schedule
To determine the breakdown regarding interest paid and reduction of principle for any given payment in an annuity, one can simply apply a simple interest calculation covering one period to determine the interest and then the remainder of the payment will be applied to reducing the principle amount owed. Continuing this process for the life of the annuity (loan) give what is known as an "amortization schedule". In general, since this involves payments in real money then we often round up the calculation of the regular payments so that the final payment will perhaps be slightly smaller than the others.