When a Long-Term Note Payable with a Fixed Interest Rate

question 4

Multiple Choice

When a long-term note payable with a fixed interest rate has fixed principal payments, it means that

• A)the periodic payment amount is fixed.
• B)the periodic payment increases over time.
• C)the periodic payment decreases over time.
• D)no conclusion can be made on the periodic payment.

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Definitions:

Principal

In agency law, the individual or entity that authorizes an agent to act on their behalf in business transactions.

Agent

An individual or entity authorized to act on behalf of another person or entity in legal or business matters.

Defraud

The act of misleading or deceiving someone typically for financial or personal gain.

Scope of Authority

The extent of powers given to an individual or a body, determined by an agreement, law, or rules governing their actions.