What determines the amount shown in an amortization schedule after each payment?

The amount shown in an amortization schedule after each payment is determined by the distribution between interest and principal. In an amortization schedule, each payment made toward a loan is split into two components: one portion pays down the interest accrued on the outstanding loan balance, while the other portion contributes to reducing the principal balance of the loan.

As loan payments are made, the interest amount typically decreases over time because it is calculated on the remaining principal balance. Conversely, the principal portion of the payment increases as the outstanding balance declines. This systematic allocation is crucial for understanding how long it will take to pay off the loan fully, as well as the total interest paid over the life of the loan.

The remaining loan term, payment structure, and current market rates are relevant factors in loan management and decision-making but do not directly dictate how payments are divided between interest and principal on a particular payment date in the amortization schedule. Instead, those factors influence the initial terms, overall costs, and repayment strategies associated with the loan.