Handbook of amortization schedule calculation

Document presentation

This document exposes all formulas and general results concerning the calculation of amortization schedules (or loan repayment schedules in the case of loans)

Methodological strong points

Each formula is always presented first in its most general form, then in the simpler forms it takes in each usual particular case.

The classical “synthetic” and “step by step” presentations are unified.

Most traditional formulas are no longer valid in degraded cases (example of “degraded” case: null interest rate in a loan with fixed payments). Here on the contrary, we always present formulas valid in all cases.

Presentation of the links between “interest rate” and “internal yield rate”.

Presentation of the links between “interest rate” and “actualization rate”.

Business strong points

All kinds of amortization schedules are considered:

Savings/loans
Several parameter stages (each one having its own interest rate, graduation rate...)
Payment in advance/payment in arrears
With or without end-of-schedule "residual value"
With fixed or graduated payments

Application to the justification of the accounting rules (especially IAS/IFRS) "spreading out" initial profits or losses.

Application to the interest rate adjustment “with impact on duration” of a loan payment schedule with residual value.

Application to the "leveling" of a set of payment schedules (often used in the mortgage loan business)

Download full document (French) as a PDF file

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