Which of the following statements is false? A)With equal instalment loans, the equal periodic payments result in the interest portion increasing each period. B)With equal instalment payments, the reduction of principal increases. C)With equal instalment loans, the equal periodic payments result in the interest portion decreasing each period. D)With equal instalment loans, the equal periodic payments are constant each period.

Question

Quizplus · Accepted Answer

In equal installment loans, the interest portion of the payment decreases with each period, not increases. This is because as the principal balance decreases over time with each payment, the amount of interest calculated on the reducing balance also decreases.

Which of the Following Statements Is false