Question

An amortizing loan is one in which:the principal remains unchanged with each payment.accrued interest is paid regularly.the maturity of the loan is variable.the principal balance is reduced with each payment.

Answer 1

Answer:

The principal balance is reduced with each payment.

Explanation:

An amortizing loan is a loan with scheduled periodic payments that consists of both the principal plus the interest. The interest along with some part of principal is being paid in every payment. In beginning, interest component is higher but it gradually deceases as principal is being paid also which decreases the interest along with it.

Therefore, For Amortized loan, The principal amount is reduced per payment made.