Amortization

Written by Jerry Ratzlaff on . Posted in Manufacturing Engineering

Amortization, abbreviated as A, is the paying off of debt in regular installments, till loan principle reduces to zero.

 

Amortization Formula

\(\large{ A =  P \;  \frac{ i \; \left( \;1 \;+\; i  \; \right)^{  n }  }{ \left( \;1 \;+\; i  \; \right)^{ n } \;-\; 1  }   }\)  

WHERE:

\(\large{ A }\) = amortization

\(\large{ i }\) = interest rate

\(\large{ P }\) = principle

\(\large{ n }\) = total number of payments

 

Tags: Equations for Manufacturing