A self-amortizing loan of $100,000 at 8% interest would have a fixed principal and interest payment of $733.76. the amount that will be credited toward principal on the first payment is $100,000 × 8% = 8,000 ÷ 12 = 666.67; $733.76 – 666.67 = $67.09.
A loan is considered to be self-amortizing if periodic payments, which include both principal and interest, are made according to a set schedule, guaranteeing that the loan will be repaid by the end of the specified term. Such payments are referred to as completely amortizing payments.
The term "Monthly Interest Payment" refers to the sum of interest paid on a Payment Date for an Interest Period based on interest computed at the Monthly Interest Rate for that particular Interest Period.
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