Calculate annuity for an annuity loan | Free template

Calculate annuity for an annuity loan is a free template to calculate periodic annuities in an annuity loan based on the total loan amount at the start.

An annuity loan is a loan where a constant annuity is paid on each payment date from a borrower to a lender. An annuity is made up of amortization and interest, where the interest component is greater than the amortization part in the beginning and then being less than the amortization part at the end. The calculation of annuities in an annuity loan means that for a given interest rate on the loan the entire amount for the loan is split in equal annuity payments over predetermined periods in the future based on the maturity of the loan.

The total interest amounts paid for an annuity loan is lower the more annuity payments there are during the duration of the annuity loan. This is because the interest rate compound effect is smaller when payments occur earlier in life because interest is calculated on the beginning amount of debt when payment should be made.

You can use this template to calculate annuities when you lend money to or borrow money from someone else and when the loan is an annuity loan. An annuity loan works well when the loan has a fixed interest rate, if the loan has a variable rate, it is better if the loan is structured as a straight loan. A straight loan means that amortization is the same for each payment and that interest is calculated on the beginning amount of debt when payment should be made. Updated: 01/01/2015 | Created by All-templates.biz

Download Calculate annuity for an annuity loan | Free template »

Tags: loan interest rates financial calculations excel spreadsheet