8. When a loan is amortized, a relatively high percentage of the payment goes to reduce the outstanding principal in the early y

Question

notka56 [123]

2 years ago

7

8. When a loan is amortized, a relatively high percentage of the payment goes to reduce the outstanding principal in the early y

ears, and the principal repayment's percentage declines in the loan's later years. a. True b. False

Business

1 answer:

Ludmilka [50] · Answer 1 · 2022-08-25T02:07:01+03:00

Answer:

False

Explanation:

Amortization an act of spreading a loan into a series of fixed payments over time. An amortized loan is a loan with scheduled periodic payments of both the principal and interest. It first pays off the relevant interest expense for the period, after which the remainder of the payment reduces the principal.

Payments are made in regular installments of constant amount that consists of both principal and interest.

Common examples of amortized loans include student loans, car loans and home mortgages.