When an Installment Note Is Structured as a "Fully Amortizing

question 59

Multiple Choice

When an installment note is structured as a "fully amortizing" loan with equal monthly payments (such as a traditional mortgage) :

• A)The portion of each payment allocated to interest expense is the same each month.
• B)The sum of the monthly payments is equal to the amount of the installment note (mortgage).
• C)The difference between the sum of all monthly payments and the principal amount of the note constitutes interest.
• D)The portion of each payment allocated to repayment of principal decreases each month as the mortgage is paid off.

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