Original PromptI can use an online amortization tool to show how payments on a fixed loan like a mortgage are applied to interest and principal and explain the difference between simple and compound interest and the difference between fixed and variable interest.
This document explores the fundamentals of interest and loans, providing learners with an understanding of simple and compound interest, the differences between fixed and variable interest rates, and how loan payments are structured. It includes key formulas for calculating interest, practical examples, and independent practice problems that reinforce learning. Additionally, it discusses amortization and how payments are allocated between principal and interest over time. The resource provides critical thinking questions and real-world applications, allowing learners to apply their knowledge to mortgage scenarios and making informed financial decisions.