Key Concept Summary

13.1: Calculating Interest and Principal Components 

• The concept of amortization
• How to calculate interest and principal components for a single payment
• How to calculate interest and principal components for a series of payments

13.2: Calculating the Final Payment

• Understanding why the final payment is different than all other payments
• How to calculate the exact amount of the final payment including both interest and principal components
• How to calculate interest and principal components involving the final payment

13.3: Amortization Schedules 

• The development of a complete amortization schedule
• The development of a complete amortization schedule due
• The development of a partial amortization schedule

13.4: Special Application: Mortgages

• The language and concepts involved in mortgages
• What determines the mortgage interest rate
• How to calculate the mortgage payment
•  The procedure involved in renewing a mortgage