First 12 Months of a 48-Month Amortization Schedule Example

Loan Assumptions for This Example

To make the mechanics of amortization concrete, we’ll use a simple sample loan: $30,000 borrowed at a 3% annual interest rate, repaid in 48 equal monthly payments. This example is drawn from Investopedia and shows a standard fixed-rate loan with monthly compounding.

Using the standard amortization formula—M = P × [r(1+r)^n] / [(1+r)^n – 1]—the monthly payment is $664.03.

Sources: Investopedia

Complete 12-Month Amortization Table

The table below shows the first 12 months of the 48-month loan. Each row lists the payment number, the total monthly payment, the interest portion, the principal portion, and the remaining balance after that payment.

Sources: Investopedia

What Each Column Means

Payment: the fixed amount due each month. In a fixed-rate loan, this number stays constant for the entire term (subject to rounding in the final payment).

Interest: the cost of borrowing for that month. It is calculated as the outstanding loan balance multiplied by the monthly interest rate.

Principal: the portion of the payment that reduces the loan balance. It equals the total payment minus the interest portion.

Balance: the outstanding loan balance after the payment is applied. It decreases each month by the principal paid.

• Interest = outstanding balance × monthly interest rate
• Principal = payment – interest
• New balance = previous balance – principal

Sources: Investopedia, Chase, SmartAsset

How the Interest Portion Changes Over Time

In an amortized loan, the interest portion of each payment declines as the balance shrinks. Because the monthly payment remains constant, the principal portion increases correspondingly. This is the classic “front-loading” of interest: early payments are mostly interest, while later payments are mostly principal.

By the final payment (month 48), the interest portion drops to $1.66 and the principal portion is $662.36, leaving a zero balance.

Sources: Investopedia, GraphCalc, EstatePass

Final Balance and Total Interest

After the 48th payment, the loan balance is zero, meaning the loan is fully paid off.

This figure confirms how much the loan costs in interest on top of the amount borrowed.

Sources: Investopedia

How to Create Your Own Schedule Using a Spreadsheet

You can build an amortization schedule in a spreadsheet using built-in financial functions. Excel’s PMT function calculates the fixed payment, IPMT returns the interest portion for a given period, and PPMT returns the principal portion.

For example, for a loan amount in cell A1, annual interest rate in A2, and number of payments in A3, you could use =PMT(A2/12, A3, -A1) to get the monthly payment. Then for each period, =IPMT(rate, period, nper, -loan) and =PPMT(rate, period, nper, -loan) give the interest and principal splits, and you can subtract the principal from the prior balance to track the remaining balance.

This approach works for any fixed-rate loan, not just the example shown. Simply replace the loan amount, rate, and term with your own numbers.

• Use PMT for the total payment
• Use IPMT and PPMT for the interest and principal portions of each payment
• Track the balance by subtracting the principal portion from the previous balance

Sources: Wall Street Prep