The effective interest method of amortization is considered to be conceptually superior to straight-line amortization.
BT: Comprehension

Question

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The effective interest method of amortization takes into account the interest that accrues on the remaining balance of the loan, which can result in a more accurate allocation of interest and principal payments over the life of the loan. Straight-line amortization simply assumes an equal allocation of interest and principal payments each period.

The Effective Interest Method of Amortization Is Considered to Be