Amortization Schedule Tutorial

In the world of finance, borrowing is very common. Businesses and people often borrow money to buy equipment, vehicles, or buildings. As part of the decision making process, it is wise to consider not only the loan payment , but also the holding period.

For example, you may want to replace vehicles after 3 rather than after the loan is paid in 5 years. However, doing so may cause unforeseen problems. Unfortunately, in the early years of a loan, most of the payment goes towards the interest rather than the principal. This could lead to trouble if the amount you owe on a vehicle is greater than what the vehicle is worth. By creating an amortization schedule, you can see how the loan will be paid off and compare the ending values to an estimate of the vehicles worth. This can lead to better decision making.

In the following tutorial, I teach you how to create a amortization schedule using formulas only (no macros or VBA). This easy to follow tutorial is for beginners and novices. As long as you have a basic understanding of Microsoft Excel, you should be fine. I hope you enjoy the course, and please leave any feedback in the comments. Happy spreadsheeting!