Each payment on a mortgage note payable consists of
A) interest on the original balance of the loan only.
B) reduction of loan principal only.
C) interest on the original balance of the loan and reduction of loan principal.
D) interest on the unpaid balance of the loan and reduction of loan principal.

Question

Quizplus · Accepted Answer

Mortgage payments typically consist of two main components: the interest charged on the unpaid balance of the loan and the reduction of the loan principal. As the loan matures, the interest portion decreases while the principal portion increases, a process known as amortization.

Each Payment on a Mortgage Note Payable Consists of