How we calculate
Each month, a fixed share of the principal is amortized. Interest is charged on the remaining balance, which falls steadily.
Formula used
Amortization per installment is always PV divided by n. Interest is the current balance times the periodic rate.
Amortização = PV / n; Juros = saldo devedor × i; Parcela = amortização + juros
Practical example
A R$ 12,000 loan at 1% monthly over 12 installments has fixed amortization of R$ 1,000 each month.
How to interpret the result
Installments decrease over time; SAC usually generates less total interest than Price for the same terms.
Limitations
Assumes a fixed rate and does not include fees, insurance or other real financing costs.