Which One of the Following Statements Is True About Amortisation

question 69

Multiple Choice

Which one of the following statements is true about amortisation?

• A) With an amortised loan, a bigger proportion of each month's payment goes toward interest in the early periods.
• B) With an amortised loan, a bigger proportion of each month's payment goes toward interest in the later periods.
• C) With an amortised loan, a smaller proportion of each month's payment goes toward interest in the early periods.
• D) None of the above.

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Definitions:

Inelastic

A description of a product or service's demand when consumers' demand is relatively insensitive to price changes.

Price Elasticity of Demand Coefficient

A metric that determines how the demand for a product reacts to adjustments in its price.

Midpoint Formula

A mathematical method used to calculate the average or midpoint of two points on a line, often used in economics to find the elasticity of demand.