Individuals often borrow funds through amortized loans, including car loans and home mortgages. Under loan amortization, a loan is repaid by making equal or annuity payments over time. Each payment pays interest and repays some of the principal. The present value interest factor for annuities (PVIFA), which determine annuity payments, aid the analysis of amortized loans. Interest is a tax-deductible expense for home mortgages and business loans. For tax purposes, it is important to determine how much of each loan payment covers interest and how much constitutes return of principal. A tool to assist this process is a loan amortization schedule, which offers a yearby- year (or period-by-period) summary of the be- ginning loan balance, the annuity payment, the interest paid, the principal repaid, and the ending balance. The interest paid always equals the beginning periodic balance multiplied by the periodic interest rate. The principal repaid is always the difference between the total payment and the interest paid. The ending balance represents the outstanding principal; it is computed by subtracting the principal repaid from the beginning balance of the period.