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interest only loan amortization schedule
Hello. Is there a way make an amortization schedule for an interest only
loan? It would compute the schedule from the loan amount, term of the loan, interest only period, and interest rate. Thanks |
#2
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interest only loan amortization schedule
Taken from Help in Xl2003:
IPMT Returns the interest payment for a given period for an investment based on periodic, constant payments and a constant interest rate. For a more complete description of the arguments in IPMT and for more information about annuity functions, see PV. best wishes -- Bernard V Liengme www.stfx.ca/people/bliengme remove caps from email "rldoan" wrote in message ... Hello. Is there a way make an amortization schedule for an interest only loan? It would compute the schedule from the loan amount, term of the loan, interest only period, and interest rate. Thanks |
#3
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interest only loan amortization schedule
"Bernard Liengme" wrote:
"rldoan" wrote: Is there a way make an amortization schedule for an interest only loan? Taken from Help in Xl2003: IPMT I don't think so. IPMT assumes a normal reduction loan, where the payment reduces the principal as well as covers the interest for the period; consequently, the amount of interest per period will decline. By definition, an interest-only loan does not reduce the principal; since the principal is not reduced, the amount of interest per period should be constant. The interest rate per period depends on the terms of the loan. One common method is to take the annual interest rate divided by the payment frequency. For example, 6%/12 for a 6% loan with monthly payments. If the principal of the loan is $100,000, the interest per period is 100000*6%/12. That should be the amount of the payment, although the lendor might round the payment to something more than the penny. Of course, that presumes a fixed interest rate. For a variable-rate loan, I would add a column in the annuity schedule for period interest rate. |
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