iPgmr.com                      Amortization Calculator                      AMORTZcgi

  AMORTZ Command Overview  

Buying a house, a car, a boat, an RV? Chances are that purchase will require a loan. How does the loan work? How much will the purchase actually cost? How do repayment options affect the cost of the loan? That is what an amortization schedule will tell you. It provides a month by month accounting of the the loan repayment and the distribution of principal and interest for each payment.

To view an amortization schedule, enter enter the amount of the loan, the annual interest rate, the payoff period in years, and click Submit. Payment amount is optional and will be computed if not submitted.

An expanded version of this loan calculator is included with the iPgmr.com Integrated Accounting System (IAS) in the form of an iSeries command, AMORTZ. See the link above for an overview of the command and its usage.

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Every loan comes with a number of terms and conditions. The ammortization schedule can help you see how each of these affect the repayment of the loan.

SIMPLE INTEREST   The amortization table is based on simple interest. That means that interest is computed as a fixed amount based on the number of days elapsed between payments. Enter the quoted interest rate and submit the request.

COMPOUNDED INTEREST   Compounded interest computes the interest each day and adds the interest to the balance before computing the next day's interest. APR (annual percentage rate) is higher than the quoted rate where interest is compounded. Change the quoted interest rate to the computed APR and resubmit the request.

NOTE: APR, in addition to compounded interest, can include other costs such as points, processing fees, etc. The Truth in Lending Act requires the listing of the APR in addition to the nominal interest rate on all consumer loans.

BALLOON PAYMENT   A balloon payment is used to provide short term financing. The loan is structured to make minimum payments for a period of time, during which other financing can be arranged. The balloon is the payment due at the end of the term and represents the outstanding balance of principal and interest at that time. Change the payback years to shorten the term, but leave payment amount as computed for the full term and resubmit the request.

NOTE: It is possible that the payments have been structured in such a way that the payments do not even cover the interest each month resulting in a balloon payment at the end of the term that is greater than the original loan amount.

ACCELERATED PAYMENTS   Accelerated payments are payments that are above and beyond the required monthly loan payment. Accelerated payment amounts increase the monthly principal payment and in doing so, shorten the payback period and the total interest paid over the life of the loan. Even a small amount, over a period of years, can make a significant difference in the total cost of a loan. Add $10, $20, $50, or $100 to the computed payment amount and resubmit the request.