Provide an appropriate response.
-Early in an installment loan term, the portion going toward interest is relatively high and the portion going toward principal is relatively low. As the term proceeds, the portion
Going toward interest gradually decreases and the portion going toward principal gradually
Increases.

Question

Quizplus · Accepted Answer

In an installment loan, payments are structured so that early payments are primarily composed of interest, and as the loan matures, the proportion of each payment that goes toward the principal increases. This is due to the way interest is calculated on the remaining balance, which decreases over time as payments are made.

Provide an Appropriate Response