Which of the following statements is true of amortization?

Question

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With an amortized loan, a bigger proportion of each month's payment goes toward interest in the early periods. As the loan progresses, an increasing amount of each payment goes towards paying off the principal. This is because the amount of interest charged is determined by the outstanding balance of the loan, and as the principal is gradually paid off, the interest charged decreases over time. Option A is incorrect because with an amortized loan, a periodical payment of principal portion gradually increases over a period. Option B is incorrect because the amortization schedule represents both the principal and interest portions of the loan. Option D is incorrect because the computation of loan amortization is based on the calculation of compound interest.

Which of the Following Statements Is True of Amortization