Loan Terminology and Amortization
Free SOA Exam FM (Financial Mathematics) lesson in Loans. 19 min read, ~2,827 words.
Loan equation:. Payment = principal / annuity factor. Outstanding balance: prospective or retrospective. Payment split:,. Closed form:. Principal grows geometrically at. Early = mostly interest, later = mostly principal. Non-integer: make full payments, then a drop payment one period later, or a balloon added to the last full payment.
Read the full lesson, free →
Worked examples, audio narration, and practice. No signup to read.
What this lesson covers
- Content
- Example 1
- Example 2
- Example 3
- Example 4
- Common Mistakes
- Key Takeaways
- Exam Shortcuts
Learning objectives
- 3a
Browse all free Exam FM lessons or jump into free Exam FM practice questions.