When a long-term note payable with a fixed interest rate has fixed principal payments, it means that
A)the periodic payment amount is fixed.
B)the periodic payment increases over time.
C)the periodic payment decreases over time.
D)no conclusion can be made on the periodic payment.

Question

Quizplus · Accepted Answer

With fixed principal payments, the interest portion of each payment decreases over time as the outstanding principal balance decreases, resulting in a decrease in the total periodic payment amount over time.

When a Long-Term Note Payable with a Fixed Interest Rate