I may be missing the obvious, but I don't understand the logic on the loan amortization template (http://office.microsoft.com/en-us/templates/TC010197771033.aspx?CategoryID=CT011377171033) on Microsoft's website. It appears to me that it dosn't correctly handle the final payment of a loan. The payment amount of the last payment is reduced to the prior month's ending balance (when the balance is less than the scheduled payment). This doesn't reduce the principal to zero. For Example: Loan Amount: $10,000 Annual Interest Rate: 8% Loan Period in Years: 1 Number of Payments Per Year: 12 Start Date of Loan: 4/1/2006 Optional Extra Payments $0.00 In this example, the Total Payment on the final row is reduced to equal the Beginning Balance from of $864.12 . This payment amount is used to apply $5.76 to pay the interest on the balance and the remainder of the payment amount is used to apply $858.36 to the principal, leaving an unpaid balance of $5.76. The balance of $864.12 minus the principal reduction of $858.36 does not equal zero. What am I missing?
