Amortization and Annuities
Amortization and Annuities

Amortization and Annuities

Refer to section 1.4: Finance Solver on page 15 for detailed explanations of concepts used in amortization and annuities.

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Ensure you have set Payments per Year (PpY) and Compounding periods per Year (CpY) correctly to avoid errors in calculations.

Use the Finance Solver tool to compute values related to loans or investments over time. Enter the known variables and solve for the unknown variable, ensuring all other fields are correctly filled.

Example: You take a loan of $50,000 with an annual interest rate of 5% and plan to pay it back over 10 years with monthly payments. Use the following steps:

  • Set PV (Present Value) to 50,000.
  • Set I% (Interest Rate) to 5.
  • Set PpY (Payments per Year) and CpY (Compounding per Year) to 12.
  • Set N (Number of Payments) to 120 (10 years × 12 months).

Press Enter Icon to compute the monthly payment (Pmt).

This tool can also be used to calculate the total interest paid over the loan's duration or the remaining balance after a certain number of payments.