1. Money  How Amortization Works  What is Amortization?
Amortization is the elimination of a debt over time with
periodic payments. For example, assume you make mortgage
payments every month. A portion of that payment covers the
interest you owe, and a portion of the payment pays down your
principal.  The majority of each payment at the beginning of an
amortization loan pays for interest. As time goes on, more and
more of each payment covers your principal. You are then
“amortizing” the loan.  Viewing Amortization in Action  If you
want to see how amortization works, it’s best to look at an
amortization schedule. It will show each payment on one line,
and how the payment is applied to the loan. You can also see
your remaining balance, and how much total interest you’ve paid
over the life of the loan.  If you want to run some numbers, use
our free amortization calculator. You can copy and paste the
amortization schedule into Excel or any other spreadsheet
program and continue to work with the numbers.  You c