Topic 4 · Interactive tool
Amortization Sandbox
One loan, paid off in equal monthly payments. Early payments are mostly interest; late ones are mostly principal. Pick any payment to see exactly how it splits.
Loan amortization · ALEKS formula
M = P (r/n)1 − (1 + r/n)−nt
Borrowing $300,000 at 6.5% for 30 years means $1,896/month, and $382,633 in interest over the life of the loan.
Monthly payment
$1,896.20
M = P (r/12) / [1 − (1+r/12)⁻¹²ᵗ]
Total cost
$682,633
M × 12 × t
Total interest
$382,633
Total cost − principal
Remaining balance over time
Cumulative principal paid
Cumulative interest paid
Principal (P) $300,000
$1,000$1,000,000
Annual rate (r) 6.50%
0.1%20%
Term (t) 30 years
1 yr40 yrs
Try a scenario
Pick a payment
payment =
interest +
principal
- Interest is on the balance before this payment:
- The rest of the payment pays down the loan:
- New balance:
Pay a little extra each month
Amortization schedule — selected payments
| Payment | Interest portion | Principal portion | Remaining balance |
|---|