interest only loan amortization schedule

[Guest]

Hello. Is there a way make an amortization schedule for an interest only
loan? It would compute the schedule from the loan amount, term of the loan,
interest only period, and interest rate.

Thanks

 

[Bernard Liengme]

Taken from Help in Xl2003:
IPMT

Returns the interest payment for a given period for an investment based on
periodic, constant payments and a constant interest rate. For a more
complete description of the arguments in IPMT and for more information about
annuity functions, see PV.

best wishes

 

[Guest]

Taken from Help in Xl2003: IPMT

I don't think so. IPMT assumes a normal reduction loan, where the payment
reduces the principal as well as covers the interest for the period;
consequently, the amount of interest per period will decline. By definition,
an interest-only loan does not reduce the principal; since the principal is
not reduced, the amount of interest per period should be constant.

The interest rate per period depends on the terms of the loan. One common
method is to take the annual interest rate divided by the payment frequency.
For example, 6%/12 for a 6% loan with monthly payments. If the principal of
the loan is $100,000, the interest per period is 100000*6%/12. That should
be the amount of the payment, although the lendor might round the payment to
something more than the penny.

Of course, that presumes a fixed interest rate. For a variable-rate loan, I
would add a column in the annuity schedule for period interest rate.