An annuity loan is a loan, which is paid back in constant rates.
Usually an annuity credit is used for real-estate credits.
The rate which can be paid is called annuity A and is the sum of interest payment ZZ and amortization payment TZ.
Since by the repayment the credit sum K decreases, also the interest which has to be paid becomes lower,
thereby the repayment part TZ in A rises.
A = ZZ + TZ. Because A is constant by definition, TZ rises if ZZ sinks.
The formula for the computation of the annuity generally reads like this:
Because not everyone likes math, here is a web-formular to answer different questions in the annuity credit scope: