Notes:
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What problem does it solve?
This code generates a loan amortization schedule for a mortgage, showing the principal and interest breakdown over time. -
How can businesses or users benefit from customizing the code?
Users can understand how their mortgage payments affect principal reduction and interest over time. -
How can businesses or users adopt the solution further, if needed?
This can be integrated into property management tools or used to plan refinancing options.
Actual Python Code:
class LoanAmortization:
def __init__(self, loan_amount, interest_rate, loan_term):
self.loan_amount = loan_amount
self.interest_rate = interest_rate / 100 / 12 # Monthly interest rate
self.loan_term = loan_term * 12 # Convert years to months
def monthly_payment(self):
# Formula for monthly mortgage payment
return (self.loan_amount * self.interest_rate) / (1 - (1 + self.interest_rate) ** -self.loan_term)
def amortization_schedule(self):
balance = self.loan_amount
monthly_payment = self.monthly_payment()
schedule = []
for month in range(1, self.loan_term + 1):
interest_payment = balance * self.interest_rate
principal_payment = monthly_payment - interest_payment
balance -= principal_payment
schedule.append((month, principal_payment, interest_payment, balance))
return schedule
# Example usage
amortization = LoanAmortization(loan_amount=300000, interest_rate=4, loan_term=30)
schedule = amortization.amortization_schedule()
for month, principal, interest, balance in schedule[:5]: # Displaying the first 5 months
print(f"Month {month}: Principal: ${principal:.2f}, Interest: ${interest:.2f}, Balance: ${balance:.2f}")
