Payments on an installment note normally include the accrued interest expense plus a portion of the amount borrowed.

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This is generally true for installment notes. The payments made by the borrower usually include both the principal amount borrowed and the interest expense accrued on the outstanding balance. Over time, the principal balance will decrease as the borrower makes these payments, but the interest expense will continue to accrue until the loan is fully paid off.

Payments on an Installment Note Normally Include the Accrued Interest