# Paying off a loan

You borrow \$130,000 at an annual interest rate of 7.25% and plan to pay it back over 15 years. Enter n=180 (or n=12 followed by clicking on the button x12), p = 7.25% (followed by clicking on /12), PV = 130,000, FV = 0, and click on the button labeled "Compute" next to the payment window. Your monthly payment turns out to be \$1,186.73. These are the default values that are present when you first activate the calculator. The computed payment actually is slightly less than \$1,186.73, but the calculator rounds payments to the next higher cent. Thus the actual future value is not zero, but \$2.67. Effectively this means that your last payment will be \$1,186.73-\$2.67 = \$1184.06.

The figure below illustrates your payments graphically. The horizontal axis shows time, the vertical your payments. The red area indicates the component of your payment that goes towards interest, the green the amount that goes towards the reduction of the principal. As time goes on, the interest component of your payment (and the part of it that you can deduct from your taxes) decreases. The yellow line indicates the growth (fast at first , and then slowing down) of the total interest you paid, the blue the gradual decrease in the principal you owe (slowly at first, and still slowly, but less so, later).

Below is the payment plan obtained with the "Print" Button. The columns contain the following data:

• # Reference number of your payment, running from 1 to n.
• payment The payment amount. It's the same for all payments in all of these examples.
• principal The part of the payment that that is subtracted from the principal.
• interest The part of the payment that you pay as interest. "interest" and "principal" add to "payment.
• balance The part of the principal remaining after the payment.
• total interest The total interest paid so far.

```Loan: Loan Amortization, version 1.0, March 1999  run # 31
Payment Plan
Principal Value    = \$130,000.00
Interest Rate      = 0.604166%
number of payments = 180
payment            = \$1,186.73
Future Value       = \$2.67

#  payment      principal  interest   balance      total interest

1  \$1,186.73    \$401.31    \$785.41    \$129,598.68      \$785.41
2  \$1,186.73    \$403.73    \$782.99    \$129,194.94    \$1,568.40
3  \$1,186.73    \$406.17    \$780.55    \$128,788.77    \$2,348.96
4  \$1,186.73    \$408.63    \$778.09    \$128,380.14    \$3,127.06
5  \$1,186.73    \$411.09    \$775.63    \$127,969.04    \$3,902.69
6  \$1,186.73    \$413.58    \$773.14    \$127,555.45    \$4,675.83
7  \$1,186.73    \$416.08    \$770.64    \$127,139.37    \$5,446.48
8  \$1,186.73    \$418.59    \$768.13    \$126,720.77    \$6,214.61
9  \$1,186.73    \$421.12    \$765.60    \$126,299.65    \$6,980.22
10  \$1,186.73    \$423.66    \$763.06    \$125,875.98    \$7,743.28
11  \$1,186.73    \$426.22    \$760.50    \$125,449.75    \$8,503.78
12  \$1,186.73    \$428.80    \$757.92    \$125,020.94    \$9,261.70
13  \$1,186.73    \$431.39    \$755.33    \$124,589.55   \$10,017.04
14  \$1,186.73    \$434.00    \$752.72    \$124,155.55   \$10,769.77
15  \$1,186.73    \$436.62    \$750.10    \$123,718.92   \$11,519.87
16  \$1,186.73    \$439.26    \$747.46    \$123,279.66   \$12,267.34
17  \$1,186.73    \$441.91    \$744.81    \$122,837.75   \$13,012.16
18  \$1,186.73    \$444.58    \$742.14    \$122,393.16   \$13,754.30
19  \$1,186.73    \$447.27    \$739.45    \$121,945.89   \$14,493.76
20  \$1,186.73    \$449.97    \$736.75    \$121,495.92   \$15,230.52
21  \$1,186.73    \$452.69    \$734.03    \$121,043.23   \$15,964.56
22  \$1,186.73    \$455.42    \$731.30    \$120,587.80   \$16,695.86
23  \$1,186.73    \$458.17    \$728.55    \$120,129.62   \$17,424.41
24  \$1,186.73    \$460.94    \$725.78    \$119,668.67   \$18,150.19
25  \$1,186.73    \$463.73    \$722.99    \$119,204.94   \$18,873.19
26  \$1,186.73    \$466.53    \$720.19    \$118,738.41   \$19,593.39
27  \$1,186.73    \$469.35    \$717.37    \$118,269.06   \$20,310.77
28  \$1,186.73    \$472.18    \$714.54    \$117,796.87   \$21,025.31
29  \$1,186.73    \$475.04    \$711.68    \$117,321.83   \$21,737.00
30  \$1,186.73    \$477.91    \$708.81    \$116,843.92   \$22,445.82
31  \$1,186.73    \$480.79    \$705.93    \$116,363.12   \$23,151.75
32  \$1,186.73    \$483.70    \$703.02    \$115,879.42   \$23,854.78
33  \$1,186.73    \$486.62    \$700.10    \$115,392.79   \$24,554.88
34  \$1,186.73    \$489.56    \$697.16    \$114,903.23   \$25,252.05
35  \$1,186.73    \$492.52    \$694.20    \$114,410.70   \$25,946.25
36  \$1,186.73    \$495.49    \$691.23    \$113,915.20   \$26,637.48
37  \$1,186.73    \$498.49    \$688.23    \$113,416.71   \$27,325.72
38  \$1,186.73    \$501.50    \$685.22    \$112,915.21   \$28,010.95
39  \$1,186.73    \$504.53    \$682.19    \$112,410.67   \$28,693.14
40  \$1,186.73    \$507.58    \$679.14    \$111,903.09   \$29,372.29
41  \$1,186.73    \$510.64    \$676.08    \$111,392.44   \$30,048.37
42  \$1,186.73    \$513.73    \$672.99    \$110,878.71   \$30,721.37
43  \$1,186.73    \$516.83    \$669.89    \$110,361.87   \$31,391.26
44  \$1,186.73    \$519.96    \$666.76    \$109,841.91   \$32,058.03
45  \$1,186.73    \$523.10    \$663.62    \$109,318.81   \$32,721.66
46  \$1,186.73    \$526.26    \$660.46    \$108,792.55   \$33,382.13
47  \$1,186.73    \$529.44    \$657.28    \$108,263.10   \$34,039.41
48  \$1,186.73    \$532.64    \$654.08    \$107,730.46   \$34,693.50
49  \$1,186.73    \$535.85    \$650.87    \$107,194.61   \$35,344.38
50  \$1,186.73    \$539.09    \$647.63    \$106,655.51   \$35,992.01
51  \$1,186.73    \$542.35    \$644.37    \$106,113.16   \$36,636.39
52  \$1,186.73    \$545.62    \$641.10    \$105,567.53   \$37,277.49
53  \$1,186.73    \$548.92    \$637.80    \$105,018.60   \$37,915.29
54  \$1,186.73    \$552.24    \$634.48    \$104,466.36   \$38,549.78
55  \$1,186.73    \$555.57    \$631.15    \$103,910.78   \$39,180.93
56  \$1,186.73    \$558.93    \$627.79    \$103,351.84   \$39,808.72
57  \$1,186.73    \$562.31    \$624.41    \$102,789.53   \$40,433.14
58  \$1,186.73    \$565.70    \$621.02    \$102,223.82   \$41,054.16
59  \$1,186.73    \$569.12    \$617.60    \$101,654.69   \$41,671.76
60  \$1,186.73    \$572.56    \$614.16    \$101,082.13   \$42,285.93
61  \$1,186.73    \$576.02    \$610.70    \$100,506.10   \$42,896.63
62  \$1,186.73    \$579.50    \$607.22     \$99,926.60   \$43,503.86
63  \$1,186.73    \$583.00    \$603.72     \$99,343.59   \$44,107.58
64  \$1,186.73    \$586.52    \$600.20     \$98,757.06   \$44,707.78
65  \$1,186.73    \$590.07    \$596.65     \$98,166.99   \$45,304.44
66  \$1,186.73    \$593.63    \$593.09     \$97,573.35   \$45,897.53
67  \$1,186.73    \$597.22    \$589.50     \$96,976.13   \$46,487.04
68  \$1,186.73    \$600.83    \$585.89     \$96,375.29   \$47,072.93
69  \$1,186.73    \$604.46    \$582.26     \$95,770.83   \$47,655.20
70  \$1,186.73    \$608.11    \$578.61     \$95,162.72   \$48,233.82
71  \$1,186.73    \$611.78    \$574.94     \$94,550.93   \$48,808.76
72  \$1,186.73    \$615.48    \$571.24     \$93,935.44   \$49,380.00
73  \$1,186.73    \$619.20    \$567.52     \$93,316.24   \$49,947.53
74  \$1,186.73    \$622.94    \$563.78     \$92,693.30   \$50,511.32
75  \$1,186.73    \$626.70    \$560.02     \$92,066.59   \$51,071.34
76  \$1,186.73    \$630.49    \$556.23     \$91,436.09   \$51,627.57
77  \$1,186.73    \$634.30    \$552.42     \$90,801.79   \$52,180.00
78  \$1,186.73    \$638.13    \$548.59     \$90,163.65   \$52,728.59
79  \$1,186.73    \$641.99    \$544.73     \$89,521.66   \$53,273.33
80  \$1,186.73    \$645.86    \$540.86     \$88,875.79   \$53,814.19
81  \$1,186.73    \$649.77    \$536.95     \$88,226.02   \$54,351.15
82  \$1,186.73    \$653.69    \$533.03     \$87,572.32   \$54,884.18
83  \$1,186.73    \$657.64    \$529.08     \$86,914.68   \$55,413.27
84  \$1,186.73    \$661.62    \$525.10     \$86,253.05   \$55,938.37
85  \$1,186.73    \$665.61    \$521.11     \$85,587.44   \$56,459.49
86  \$1,186.73    \$669.63    \$517.09     \$84,917.80   \$56,976.58
87  \$1,186.73    \$673.68    \$513.04     \$84,244.11   \$57,489.62
88  \$1,186.73    \$677.75    \$508.97     \$83,566.36   \$57,998.60
89  \$1,186.73    \$681.84    \$504.88     \$82,884.51   \$58,503.48
90  \$1,186.73    \$685.96    \$500.76     \$82,198.54   \$59,004.24
91  \$1,186.73    \$690.11    \$496.61     \$81,508.42   \$59,500.85
92  \$1,186.73    \$694.28    \$492.44     \$80,814.14   \$59,993.30
93  \$1,186.73    \$698.47    \$488.25     \$80,115.66   \$60,481.55
94  \$1,186.73    \$702.69    \$484.03     \$79,412.97   \$60,965.59
95  \$1,186.73    \$706.94    \$479.78     \$78,706.02   \$61,445.37
96  \$1,186.73    \$711.21    \$475.51     \$77,994.81   \$61,920.89
97  \$1,186.73    \$715.51    \$471.21     \$77,279.30   \$62,392.11
98  \$1,186.73    \$719.83    \$466.89     \$76,559.46   \$62,859.00
99  \$1,186.73    \$724.18    \$462.54     \$75,835.28   \$63,321.55
100  \$1,186.73    \$728.55    \$458.17     \$75,106.72   \$63,779.72
101  \$1,186.73    \$732.96    \$453.76     \$74,373.76   \$64,233.49
102  \$1,186.73    \$737.38    \$449.34     \$73,636.37   \$64,682.83
103  \$1,186.73    \$741.84    \$444.88     \$72,894.53   \$65,127.72
104  \$1,186.73    \$746.32    \$440.40     \$72,148.20   \$65,568.12
105  \$1,186.73    \$750.83    \$435.89     \$71,397.37   \$66,004.02
106  \$1,186.73    \$755.37    \$431.35     \$70,642.00   \$66,435.38
107  \$1,186.73    \$759.93    \$426.79     \$69,882.06   \$66,862.17
108  \$1,186.73    \$764.52    \$422.20     \$69,117.54   \$67,284.38
109  \$1,186.73    \$769.14    \$417.58     \$68,348.39   \$67,701.96
110  \$1,186.73    \$773.79    \$412.93     \$67,574.60   \$68,114.90
111  \$1,186.73    \$778.46    \$408.26     \$66,796.13   \$68,523.16
112  \$1,186.73    \$783.16    \$403.56     \$66,012.96   \$68,926.72
113  \$1,186.73    \$787.90    \$398.82     \$65,225.06   \$69,325.55
114  \$1,186.73    \$792.66    \$394.06     \$64,432.40   \$69,719.62
115  \$1,186.73    \$797.45    \$389.27     \$63,634.95   \$70,108.90
116  \$1,186.73    \$802.26    \$384.46     \$62,832.68   \$70,493.36
117  \$1,186.73    \$807.11    \$379.61     \$62,025.56   \$70,872.97
118  \$1,186.73    \$811.99    \$374.73     \$61,213.57   \$71,247.71
119  \$1,186.73    \$816.89    \$369.83     \$60,396.67   \$71,617.54
120  \$1,186.73    \$821.83    \$364.89     \$59,574.84   \$71,982.44
121  \$1,186.73    \$826.79    \$359.93     \$58,748.04   \$72,342.37
122  \$1,186.73    \$831.79    \$354.93     \$57,916.25   \$72,697.31
123  \$1,186.73    \$836.81    \$349.91     \$57,079.43   \$73,047.22
124  \$1,186.73    \$841.87    \$344.85     \$56,237.55   \$73,392.07
125  \$1,186.73    \$846.96    \$339.76     \$55,390.59   \$73,731.84
126  \$1,186.73    \$852.07    \$334.65     \$54,538.51   \$74,066.49
127  \$1,186.73    \$857.22    \$329.50     \$53,681.29   \$74,396.00
128  \$1,186.73    \$862.40    \$324.32     \$52,818.88   \$74,720.32
129  \$1,186.73    \$867.61    \$319.11     \$51,951.27   \$75,039.44
130  \$1,186.73    \$872.85    \$313.87     \$51,078.41   \$75,353.31
131  \$1,186.73    \$878.13    \$308.59     \$50,200.28   \$75,661.91
132  \$1,186.73    \$883.43    \$303.29     \$49,316.84   \$75,965.20
133  \$1,186.73    \$888.77    \$297.95     \$48,428.07   \$76,263.16
134  \$1,186.73    \$894.14    \$292.58     \$47,533.92   \$76,555.74
135  \$1,186.73    \$899.54    \$287.18     \$46,634.38   \$76,842.93
136  \$1,186.73    \$904.98    \$281.74     \$45,729.40   \$77,124.68
137  \$1,186.73    \$910.44    \$276.28     \$44,818.95   \$77,400.96
138  \$1,186.73    \$915.94    \$270.78     \$43,903.00   \$77,671.74
139  \$1,186.73    \$921.48    \$265.24     \$42,981.52   \$77,936.99
140  \$1,186.73    \$927.04    \$259.68     \$42,054.47   \$78,196.67
141  \$1,186.73    \$932.65    \$254.07     \$41,121.82   \$78,450.75
142  \$1,186.73    \$938.28    \$248.44     \$40,183.53   \$78,699.19
143  \$1,186.73    \$943.95    \$242.77     \$39,239.58   \$78,941.97
144  \$1,186.73    \$949.65    \$237.07     \$38,289.92   \$79,179.04
145  \$1,186.73    \$955.39    \$231.33     \$37,334.52   \$79,410.37
146  \$1,186.73    \$961.16    \$225.56     \$36,373.36   \$79,635.94
147  \$1,186.73    \$966.97    \$219.75     \$35,406.38   \$79,855.69
148  \$1,186.73    \$972.81    \$213.91     \$34,433.57   \$80,069.61
149  \$1,186.73    \$978.69    \$208.03     \$33,454.87   \$80,277.64
150  \$1,186.73    \$984.60    \$202.12     \$32,470.26   \$80,479.76
151  \$1,186.73    \$990.55    \$196.17     \$31,479.71   \$80,675.94
152  \$1,186.73    \$996.54    \$190.18     \$30,483.17   \$80,866.13
153  \$1,186.73  \$1,002.56    \$184.16     \$29,480.61   \$81,050.30
154  \$1,186.73  \$1,008.61    \$178.11     \$28,471.99   \$81,228.41
155  \$1,186.73  \$1,014.71    \$172.01     \$27,457.28   \$81,400.43
156  \$1,186.73  \$1,020.84    \$165.88     \$26,436.44   \$81,566.32
157  \$1,186.73  \$1,027.00    \$159.72     \$25,409.43   \$81,726.04
158  \$1,186.73  \$1,033.21    \$153.51     \$24,376.21   \$81,879.55
159  \$1,186.73  \$1,039.45    \$147.27     \$23,336.76   \$82,026.83
160  \$1,186.73  \$1,045.73    \$140.99     \$22,291.02   \$82,167.82
161  \$1,186.73  \$1,052.05    \$134.67     \$21,238.96   \$82,302.49
162  \$1,186.73  \$1,058.41    \$128.31     \$20,180.55   \$82,430.81
163  \$1,186.73  \$1,064.80    \$121.92     \$19,115.75   \$82,552.74
164  \$1,186.73  \$1,071.23    \$115.49     \$18,044.51   \$82,668.23
165  \$1,186.73  \$1,077.71    \$109.01     \$16,966.80   \$82,777.25
166  \$1,186.73  \$1,084.22    \$102.50     \$15,882.57   \$82,879.75
167  \$1,186.73  \$1,090.77     \$95.95     \$14,791.80   \$82,975.71
168  \$1,186.73  \$1,097.36     \$89.36     \$13,694.44   \$83,065.08
169  \$1,186.73  \$1,103.99     \$82.73     \$12,590.45   \$83,147.82
170  \$1,186.73  \$1,110.66     \$76.06     \$11,479.78   \$83,223.88
171  \$1,186.73  \$1,117.37     \$69.35     \$10,362.41   \$83,293.24
172  \$1,186.73  \$1,124.12     \$62.60      \$9,238.29   \$83,355.85
173  \$1,186.73  \$1,130.91     \$55.81      \$8,107.37   \$83,411.66
174  \$1,186.73  \$1,137.74     \$48.98      \$6,969.62   \$83,460.64
175  \$1,186.73  \$1,144.62     \$42.10      \$5,825.00   \$83,502.75
176  \$1,186.73  \$1,151.53     \$35.19      \$4,673.46   \$83,537.94
177  \$1,186.73  \$1,158.49     \$28.23      \$3,514.97   \$83,566.18
178  \$1,186.73  \$1,165.49     \$21.23      \$2,349.48   \$83,587.42
179  \$1,186.73  \$1,172.53     \$14.19      \$1,176.94   \$83,601.61
180  \$1,186.73  \$1,179.61      \$7.11         -\$2.67   \$83,608.72
```

Last change: [12-Mar-1999]