Installment notes payable that require payments of accrued interest to date plus equal amounts of principal
A)Result in periodic payments that gradually decrease in amount.
B)Result in equal periodic payments
C)Result in periodic payments that gradually increase in amount
D)Result in increasing amounts of interest each period
E)Are not legal

Question

Quizplus · Accepted Answer

Because payments include accrued interest to date in addition to principal, as the principal amount decreases over time, the interest amount included in each payment also decreases, resulting in periodic payments that gradually decrease in amount.

Installment Notes Payable That Require Payments of Accrued Interest to Date