A 25-year monthly payment mortgage loan for RM200,000 is offered a nominal rate of interest of 6% convertible monthly. Calculate the, a. monthly payment of the loan. b. balance of the loan after five years. c. total principals and total interests respectively that are paid in 5-th year. After five years, the interest rate increases to a nominal rate of 7.2% convertible monthly. Determine,

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Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.