What is the purpose of a loan amortization table?
A)To apply straight-line amortization to the loan.
B)To apply declining-balance amortization to the loan.
C)To show the breakdown of each loan payment into its interest and principal components.
D)To keep track of the balance of the loan outstanding if they do not record the loan on their books.

Question

Quizplus · Accepted Answer

The purpose of a loan amortization table is to show the breakdown of each loan payment into its interest and principal components. This allows the borrower to see how much of each payment is going towards paying off the loan balance and how much is going towards paying interest. It also helps the borrower to plan their budget and understand the total cost of the loan.

What Is the Purpose of a Loan Amortization Table