What is an amortization schedule?

An amortization schedule is a detailed table that outlines how each payment on a loan is applied over time, specifically breaking down the portions that go towards interest and principal repayment. This is particularly useful for understanding the dynamics of a loan, as it provides clarity on how the balance decreases over the life of the loan.

By including each payment's breakdown, the schedule allows borrowers to see how their payments affect the principal balance and interest incurred. This can help individuals and businesses to plan their finances, as they can anticipate how long it will take to pay off the loan in full and understand the total interest costs across the loan's life.

In contrast, the other options don’t capture the essence of what an amortization schedule is designed for. For example, a summary of total expenses or a document tracking sales revenue serves entirely different functions related to financial management and analysis, while a list of assets and liabilities pertains to balance sheet entries, which do not include loan repayment specifics.