Which of the Following Statements Pertaining to Instalment Notes with Blended

question 15

Multiple Choice

Which of the following statements pertaining to instalment notes with blended principal and interest payments is correct?

• A) The portion of each instalment applied to the interest and principal will remain constant.
• B) The portion of the instalment applied to the interest will depend on prevailing market interest rates, with the difference being applied to the principal.
• C) The portion of the instalment applied to the principal will increase, while the portion applied to the interest will decrease over time.
• D) The portion of the instalment applied to the principal will decrease, while the portion applied to the interest will increase over time.

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