Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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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.
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