Step through the payments and watch the interest shrink as the principal share grows.
$4,800
$18,482
$41,518
| Payment | Interest | Principal | Balance |
|---|---|---|---|
| — | $60,000 | ||
| 1 ← | $4,800 | $18,482 | $41,518 |
| 2 | $3,321 | $19,961 | $21,557 |
| 3 | $1,725 | $21,557 | $0 |
Every payment is $23,282. Only the split changes.
An is paid off in equal installments, but the split between interest and principal is not equal. Each payment's interest is the rate times whatever balance is still owed.
As the balance falls, so does the interest charged on it — so more of each later payment goes to principal, even though every payment is the same size.