[Glossary](https://pecuvo.eu/en/glossary/) · Credit and debt # Annuity repayment **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). ## In depth in the modules - [Module 7](https://pecuvo.eu/en/modules/interest-compounding-capitalisation/) ## Related terms - [Principal](https://pecuvo.eu/en/glossary/principal/) - [Interest](https://pecuvo.eu/en/glossary/interest/) - [Repayment schedule](https://pecuvo.eu/en/glossary/repayment-schedule/) - [Interest rate (borrowing rate)](https://pecuvo.eu/en/glossary/interest-rate/) - [APR (annual percentage rate of charge)](https://pecuvo.eu/en/glossary/apr/)