Question

9-10 What is an amortized loan? What is an amortization schedule and how is it used?

9-10 What is an amortized loan? What is an amortization schedule and how is it used?

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Answer #1

Amortized loan is a type of loan in which there will be schedule periodic repayments which are applicable on both the principal amount and the interest accrued so these periodic repayments will be including both the amount of principal and the interest accrued and they will be spreading out loan into a series of the fixed payment so the loan is paid off at the end of the payment schedule.

Amortization schedule is a complete schedule of periodic loan repayment which will be reflecting the amount of principal as well as the amount of interest that will be comprising on each payment until the loan is paid off at the end and it is used for calculation of the regular payment on mortgage over a time period the schedule will be reflecting that, As the loan will be progressing, largest share of payment will be going towards paying of the principal rather than paying off the interest.

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