Progressively with each period, the amount paid as interest would decrease, and the amount paid for the principal would increase until the principal is paid off completely. That’s because the principal amount is initially large. Naturally, during the first payments, a large portion of the periodical payments would be dedicated to interest. This payment is split between paying for the principal amount (the size of the loan arrangement) and paying interest on the loan. Usually, the debtor pays a fixed amount every period until the loan is paid off. This payment is divided between paying off the principal and paying interest on the loan. It summarizes how much is paid each period.
An amortization schedule is a table designed to keep track of periodic payments for amortizing loans.
