How to make an ANNUITY AMORTIZATION SCHEDULE (Quick Guide) 💡 | Finance 101
In this video, we break down the concept of loan amortization for a 5-year loan with annual payments. Whether you're planning to take out a loan or already have one, understanding how your payments are structured can help you manage your finances better. We'll walk you through a simple formula to calculate your fixed annual payment and explain how each payment is split between interest and principal over the life of the loan.
💰 Example Used: $10,000 loan at 5% annual interest rate, paid off over 5 years.
📊 What You'll Learn:
How to calculate your annual payment using the annuity formula.
How each payment is broken down into interest and principal.
How the loan balance decreases over time with each payment.
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