Eratuslaskujen

Eratuslaskujen is a Finnish term used to describe the calculations and scheduling involved in installment invoicing. It refers to the method of determining how much each installment should be, when it is due, and how payments are allocated between principal, interest, fees, and taxes over the repayment period. The concept is applied in contexts such as consumer loans, leasing arrangements, and recurring billing where payments are divided into regular installments rather than paid in a single sum.

Etymology and scope: The word is formed from erä (installment or batch) and lasku (invoice or bill), with eratuslaskujen functioning as the genitive plural form. In practice, eratuslaskujen governs both the calculation of installment amounts and the presentation of installment invoices to customers. It is relevant for financial institutions, leasing companies, and service providers that offer pay-as-you-go or financed products.

Calculation approach: Typical eratuslaskujen calculations use an amortization approach, distributing a principal amount and any interest over a set number of periods. The standard fixed installment method calculates a uniform payment that covers both interest and principal across all periods, while allowing for variations such as introductory offers, fees, or taxes. The result is an installment schedule that specifies the amount due each period and the outstanding balance after each payment.

Example: A loan of 10,000 euros with a monthly rate of 0.5% and a 24-month term yields a fixed monthly installment of roughly 446 euros. The first payment typically consists of about 50 euros in interest and the remaining portion toward principal, with the balance decreasing over time.

See also: Amortization, installment loan, billing cycle.