Finance and Accounting Automation - Loan Amortization Calculator

 Notes:

• What problem does it solve?: Automatically calculates loan amortization schedules, breaking down each payment into principal and interest components.

• How can businesses benefit from customizing the code?: Customize loan parameters like payment frequency, loan term, and interest rates.

• How can businesses adopt the solution further?: Integrate the tool with loan management software or extend it to generate reports.

Actual Python Code:

import numpy as np

import pandas as pd

class LoanAmortization:

    def __init__(self, loan_amount, interest_rate, periods):

        self.loan_amount = loan_amount

        self.interest_rate = interest_rate / 100 / 12  # Monthly interest rate

        self.periods = periods

    def calculate_amortization(self):

        monthly_payment = self.loan_amount * self.interest_rate / (1 - (1 + self.interest_rate) ** -self.periods)

        schedule = []

        balance = self.loan_amount

        for period in range(1, self.periods + 1):

            interest = balance * self.interest_rate

            principal = monthly_payment - interest

            balance -= principal

            schedule.append([period, principal, interest, monthly_payment, balance])

        return pd.DataFrame(schedule, columns=['Period', 'Principal Payment', 'Interest Payment', 'Total Payment', 'Remaining Balance'])

    def display_amortization_schedule(self):

        df = self.calculate_amortization()

        print(df)

# Example usage

loan = LoanAmortization(loan_amount=10000, interest_rate=5, periods=12)

loan.display_amortization_schedule()