Amortization, interest and principal

Introduction to Financial Concepts in Python

Dakota Wixom

Quantitative Finance Analyst

Amortization

Principal (Equity): The amount of your mortgage paid that counts towards the value of the house itself

Interest Payment (${IP}_{Periodic}$)

$ = RMB * R_{Periodic} $

Principal Payment (${PP}_{Periodic}$)

$ = {MP}_{Periodic} - {IP}_{Periodic} $

PP: Principal Payment
MP: Mortgage Payment
IP: Interest Payment
R: Mortgage Interest Rate (Periodic)
RMB: Remaining Mortgage Balance

Accumulating values via for loops in Python

Example:

accumulator = 0
for i in range(3):
    if i == 0: 
        accumulator = accumulator + 3 
    else:
        accumulator = accumulator + 1
    print(str(i)+": Loop value: "+str(accumulator))

0: Loop value: 3
1: Loop value: 4
2: Loop value: 5

Let's practice!

Introduction to Financial Concepts in Python