Final answer:
When loan payments are amortized, the total amount you owe every month decreases.
Step-by-step explanation:
When loan payments are amortized, the total amount you owe every month decreases.
Amortization is a process of paying off a loan over time through regular monthly payments. In an amortized loan, each payment consists of both principal (the amount you borrowed) and interest (the cost of borrowing).
At the beginning of the loan term, most of your monthly payment goes towards interest. However, as you make more payments, the principal balance decreases. This means that the interest portion of your payment also decreases, causing the total amount you owe every month to decrease.