The effective-interest method of amortization results in varying amounts of amortization, and interest expense per period but a constant rate of interest.

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The effective-interest method of amortization results in varying amounts of amortization expense and interest expense per period due to the application of a constant interest rate on the carrying amount of the debt, which changes over time as the principal is paid down.

The Effective-Interest Method of Amortization Results in Varying Amounts of Amortization