What does an amortization schedule typically show?

An amortization schedule is a detailed table that outlines each payment on a loan over time, breaking down how much of each payment goes toward the principal balance and how much goes toward interest. This format enables borrowers to see how their loan balance decreases with each payment and the proportion that goes to interest versus principal. Understanding this breakdown is crucial for borrowers as it helps them recognize how much they are paying in interest over the life of the loan versus the amount applied to reduce the principal.

The other choices do not accurately capture the complete purpose of an amortization schedule. For example, while an amortization schedule does relate to the total loan amount and repayment term, it specifically details the payment breakdown rather than just stating those figures. Similarly, while interest amounts are included, the schedule provides a comprehensive view that encompasses both principal and interest in each payment, rather than focusing solely on interest. Lastly, an amortization schedule does not typically provide information about fees associated with loans, which is a separate aspect of loan documentation. Thus, the correct answer effectively encapsulates the primary function of an amortization schedule in financial planning related to loans.