Which of the following characteristics is not descriptive of an amortization schedule?
A) Each payment is the same.
B) The same dollar amount of interest is paid with each payment.
C) Payment on principal increases with each total payment.
D) Balance owed is reduced by each payment.

Question

Quizplus · Accepted Answer

An amortization schedule typically involves payments that are the same total amount each period, but the portion of each payment that goes towards interest decreases over time, while the portion that goes towards the principal increases. This means that the same dollar amount of interest is not paid with each payment; instead, the interest portion decreases with each payment.

Which of the Following Characteristics Is Not Descriptive of an Amortization