Which of the following is NOT true with regard to an amortization table?
A)The interest payment for a period is equal to the periodic interest rate multiplied by the beginning-of-the-period principal balance.
B)The remaining principal balance at the end of a payment period is equal to the beginning-of-the-period principal less the total payment.
C)The total payment is calculated by using the present value of an annuity formula.
D)All of the above are true.

Question

Quizplus · Accepted Answer

The remaining principal balance at the end of a payment period is equal to the beginning-of-the-period principal balance less the principal portion of the payment for that period, not less the total payment. The total payment includes both principal and interest components.

Which of the Following Is NOT True with Regard to an Amortization