Amortization Methods for Farm Mortgage Loans (Classic Reprint)

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Excerpt from Amortization Methods for Farm Mortgage LoansThe simplest and, in general, the most satisfactory way to account for amortization payments is to take out of each installment an amount sufficient to cover the interest on the unpaid principal and apply the remainder immediately to the reduction of the principal. The installments are to be paid at the end of each year, not at the beginning. This method, which will be referred to as Method N o. 1 throughout this circular, gives a new and smaller-principal each year, and hence each year a smaller interest charge. It shows exactly what part of each payment has been used for interest and what part has been applied on the principal, and exactly how much is still due on the loan. The whole process is one which will be familiar to any farmer who has ever borrowed money with the privilege of making partial payments on the principal. That is, it makes of amortization a simple, familiar process, rather than some thing entirely new and untried.About the PublisherForgotten Books publishes hundreds of thousands of rare and classic books. Find more at www.forgottenbooks.comThis book is a reproduction of an important historical work. Forgotten Books uses state-of-the-art technology to digitally reconstruct the work, preserving the original format whilst repairing imperfections present in the aged copy. In rare cases, an imperfection in the original, such as a blemish or missing page, may be replicated in our edition. We do, however, repair the vast majority of imperfections successfully, any imperfections that remain are intentionally left to preserve the state of such historical works.