In short: an annuity repayment is an equal instalment over the whole term of a loan, in which interest makes up most of the payment at the start and principal most of it towards the end.
Simply put: the formula is: instalment = amount × i ÷ (1 − (1 + i)^−n), where i is the monthly rate and n the number of months. The instalment stays the same (at a fixed rate), but its make-up changes: each month interest is charged on a smaller balance, so more goes to the principal.
Example: €10,000 over 36 months at 6 % a year → instalment €304.22. In the first instalment €50.00 is interest and €254.22 principal. In total you repay €10,951.90, of which €951.90 is interest.
Watch out: a longer term lowers the instalment but increases the total interest paid.
Source: Pecuvo Module 7, Chapter 6 (calculations by Pecuvo, 19.10.2026).