Question

Midway through the life of an amortized loan, the percentage of the payment that represents interest could be equal to, less than, or greater than to the percentage that represents repayment of principal. The proportions depend on the original life of the loan and the interest rate. a. True b. False

Answer 1

a. True

Step-by-step explanation:

In every type of loan, the principal amount, interest rate, and the duration of the loan are compulsory. Without these three components, no loan could be approved.

Moreover, the terms and conditions are also equally important.

So, the given statement is true because interest is paid on the periodic basis or the yearly basis which depends upon the term and conditions of the loan.