Loan Amortization
Amount Borrowed: $364,000
Total Interest Paid: $340,290
Total Paid to the Bank: $705,190
Total Interest Paid: $340,290
Total Paid to the Bank: $705,190
What does it mean to Amortize a loan? It is the gradual repayment of a debt over a specific period of time. The monthly payments stay the same, while the interest component of each payment decreases, and the principle component of each payment increases during the life of the loan which will eventually cause the unpaid principal balance to be zero at the end of the fixed period of time.