Answer:
The model is very simple.
We have a mortgage, which is our total payment or principal. The APR is the interest rate. The term is 20 years.
With this information, we can build an amortization schedule, with the following elements:
Period: the period of the payment. The first payment corresponds to the first period, the second payment corresponds to thes second period, and so on.
Principal: the amount of money from the payment that goes to the principal.
Interest: the amount of money from the payment that goest to interest.
Payment: principal + interest of the period added.
Balance: total payment minus the principal payment of the period.
With this model, a simple amortization shcedule can be built, either manually, or on a computer spreadsheet like EXCEL.
