Which of the following statement is true of amortization? The computation of loan amortization is wholly based on the computation of simple interest. Amortization solely refers to the total value to be paid by the borrower at the end of maturity. The amortization schedule represents only the interest portion of the loan. The amortization schedule provides principal, interest, and unpaid principal balance for each month.   In a typical loan amortization schedule: The amount of money paid towards reducing the loan balance decreases over time. The amount of interest paid each period does not remain constant. The amount of each payment does not remain constant. The amount of interest paid each period increases over time.

Personal Finance
13th Edition
ISBN:9781337669214
Author:GARMAN
Publisher:GARMAN
Chapter9: Obtaining Affordable Housing
Section9.4: Financing A Home
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Which of the following statement is true of amortization?

  1. The computation of loan amortization is wholly based on the computation of simple interest.
  2. Amortization solely refers to the total value to be paid by the borrower at the end of maturity.
  3. The amortization schedule represents only the interest portion of the loan.
  4. The amortization schedule provides principal, interest, and unpaid principal balance for each month.

 

In a typical loan amortization schedule:

  1. The amount of money paid towards reducing the loan balance decreases over time.
  2. The amount of interest paid each period does not remain constant.
  3. The amount of each payment does not remain constant.
  4. The amount of interest paid each period increases over time.
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