# How to Calculate Amortization Quarterly

Amortization is defined as the amount with which the principal of a mortgage loan decreases over time as payments are made. The amount of time required to reach full amortization of a mortgage depends on the loan terms. However, there are a number of ways to determine the rate of amortization, and the length of time required to reach full amortization of any loan. In this article, you will learn the standard formula for calculating the quarterly amortization rate, as well as how to utilize free annual and quarterly amortization online calculators.

## Steps

- 1
**Determine the value of the variables.**While the terms of a mortgage loan will vary, the variables used to determine the amortization of the loan remain the same: M (monthly mortgage payment), P (mortgage principal), I (interest rate) and N (number of months). To determine the variables of your loan, review the loan contract, your amortization schedule or consult your mortgage broker. - 2
**Use the standard formula for calculating amortization.**Once you have determined the amounts of each of the 4 variables (M, I, P and N), you can insert them into the amortization formula. The formula for calculating the amortization of a loan is: A = P(1 + I)n /(1 + I )n - 1.- Reduce the fraction in the equation by calculating the numerator. Add the number of months (N) to the product of the interest rate (I) multiplied by the number of months (N). Multiply that number by I. The numerator has been reduced.
- Calculate the denominator. Add the number of months (N) to the product of the interest rate (I) multiplied by the number of months (N). The denominator has been reduced.
- Convert the resulting fraction to a whole number and multiply it by the loan principal (P). The resulting figure represents the length of time required to reach full amortization given the terms of the loan.

- 3
**Calculate the quarterly amortization rate of your mortgage.**Once you have successfully determined the annual rate of amortization for your mortgage loan, you can determine the quarterly rate by dividing the annual rate by 4, which is the number of quarters in a single year. For example, if the annual amortization rate (r) is $14,400, then the quarterly rate (q) of amortization is $3,600, or q = r / 4. - 4
**Use an online amortization calculator to determine the amortization of your loan.**Several websites offer free online amortization calculators. Enter the amounts of each variable into the corresponding fields in the amortization calculator. The resulting figure will represent the length of time required to reach full amortization given the terms of the loan. To find online amortization calculators, perform an Internet search for "quarterly amortization calculator" or "amortization schedule."

## Sources and Citations

## Article Info

Categories: Mortgages and Loans