Excellency AcademyOpen the appFinanceTier 520 minadvanced
Amortisation Split for a Property Loan
Work out how much of a specific loan payment is interest versus principal.
What you will learn
- Use IPMT and PPMT to split one specific payment into its interest and principal portions
- Explain why the interest portion shrinks every month as the outstanding balance falls
- Recognise that a constant total payment does not mean a constant interest/principal split
Excel skills
IPMT, PPMT · Financial Functions
The task
The Loan Terms tab has a 240-month property loan. I need to know, for payment 1, payment 120 and the final payment, how much of each one is interest and how much is paying down the principal. The total payment is the same every month - the split between the two is not.
You work in a real spreadsheet in your browser, and your answer is checked against hidden traps the moment you submit.