In mortgage payments:
A) the roles of both interest and principal are constant throughout because of the 'straight line' method used.
B) the interest and principal always move in opposite trends.
C) as the principal declines, the interest component plays a diminishing role.
D) as the principal declines, the interest component plays an increasing role.

Question

Quizplus · Accepted Answer

As the principal declines, the interest component plays a diminishing role because the interest is calculated on the outstanding principal balance.

In Mortgage Payments