Correct way to book a [auto] loan

[Mike Sabin]

For my loans, I have created an amortization schedule in gnumeric that 
shows interest and principal for the life of the loan.  Use the ipmt and 
ppmt functions to get the interest portion and principal portion, 
respectively, of your total payment, as a function of the interest rate, 
term, payment number, and orig. principal.  When I get ready to enter my 
monthly loan transaction in gnucash, I just open my spreadsheet, use the 
current month's interest and principal numbers for the transaction, and 
mark that month complete in my spreadsheet.  Of course, many loans have 
non-standard amortization schemes, so check your loan docs.

Mike Sabin


P.S. I'd be happy to email my spreadsheet to anyone interested.


Linas Vepstas wrote:

> On Tue, Jan 08, 2002 at 02:41:04PM -0800, Dave Peticolas was heard to remark:
> 
>>though I'm not sure the exact way to figure interest vs
>>principal in payments (my car loan statement breaks it
>>down in a way that seems random to me :)
>>
> 
> When you make a payment, you pay off 100% of the interest accumulated
> since the last payment.  If there's anything left over, it reduces
> the principal.  Because of this, the ratio of pinc/int changes over time.
> 
> --linas
> 
> 
> 
>