An installment note calling for equal total payments each period will result in an interest portion that decreases in each successive period.

Name: An installment note calling for equal total payments each period will result in an interest portion that decreases in each successive period.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

As the principal balance decreases with each payment, the interest calculated on the remaining balance also decreases, leading to a smaller interest portion in each successive period.

An Installment Note Calling for Equal Total Payments Each Period