O'Reilly logo

What Every Real Estate Investor Needs to Know About Cash Flow... And 36 Other Key Financial Measures, Updated Edition, 2nd Edition by Frank Gallinelli

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

CHAPTER 36Calculation 30: Principal and Interest per Period

What It Means

In an amortized mortgage with level payments, a portion of each payment represents interest, and the balance is applied to the reduction of principal. How do you figure the interest/principal breakdown for a given payment?

In the chapter “Principal Balance/Balloon Payment,” you saw a page from an amortization schedule that helps make this clear. In the particular loan shown there, the annual interest rate is 12%. You can calculate the monthly payment amount by using any of the techniques in the “Mortgage Payment/Mortgage Constant” chapter or by simply letting the amortization schedule software do it for you. At 12% interest and over a term of 360 months, the monthly payment ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required