A note which requires payments of accrued interest plus equal amounts of principal will have cash flows of equal amounts over the life of the note.

Question

Quizplus · Accepted Answer

The cash flows will decrease over the life of the note because as the principal balance decreases, the amount of interest accrued decreases, making each payment smaller when combined with the constant principal repayment amount.

A Note Which Requires Payments of Accrued Interest Plus Equal