Question

In each succeeding payment on an installment note: a. The amounts paid for both interest and principal increase proportionately. b. The amount that goes to decreasing the carrying value of the note is unchanged. c. The amount that goes to decreasing the carrying value of the note decreases.

Answer 1

Answer:

In each succeeding payment on an installment note:

d. The amount that goes to decreasing the carrying value of the note increases.

Explanation:

• The option a is incorrect as the amount paid for both interest and principal don't increase proportionately.
• The option b is also incorrect as the the amount that goes to decreasing the carrying value of the note is not remain unchanged rather this values increases.
• The option c is also incorrect as the amount that goes to decreasing the carrying value of the note not decreases rather it increases.