How To Calculate Amortization Of Prior Service Cost
How to Summate Amortization.
Amortization is an bookkeeping technique used to periodically lower the volume value of a loan or intangible nugget over a set period of time.
When businesses amortize expenses over time, they assist tie the cost of using an asset to the revenues it generates in the same accounting menstruation.
Formula to calculate amortization.
- P = Principle
- r= Rate of involvement
- t = Fourth dimension in terms of year
- n = Monthly payment in a twelvemonth
- I = Involvement
Instance:
Summate acquittal if the loan's principle amount is $ iii,000, and your supposed to pay it dorsum after 5 years semi annually with a vii% interest rate.
Therefore, the amortization cost is $ 323.58.
Source: https://www.learntocalculate.com/how-to-calculate-amortization/
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