Monthly installment payments on a note payable include both an amount that represents interest and an amount that represents a reduction of the outstanding loan balance.

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Monthly installment payments on a note payable typically include both an amount of interest and a portion of the principal balance being paid off. As payments are made over time, the remaining principal balance will decrease, resulting in a reduction in the amount of interest charged on subsequent payments.

Monthly Installment Payments on a Note Payable Include Both an Amount