Which of the Following Statements Is True of Amortization

question 72

Multiple Choice

Which of the following statements is true of amortization?

• A) With an amortized loan, a bigger proportion of each month's payment goes toward interest in the early periods.
• B) With an amortized loan, a bigger proportion of each month's payment goes toward interest in the later periods.
• C) With an amortized loan, a smaller proportion of each month's payment goes toward interest in the early periods.
• D) With an amortized loan, the interest portion of each month's payment remains unchanged.

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Definitions:

Short-Run Supply Schedule

A graphical or tabular representation of the quantity of goods a firm is willing and able to supply at different price points, over a short period.

Total Profit

The net amount of money a business retains after subtracting all its expenses, taxes, and costs from its total revenue.

MC Curve

Marginal Cost Curve, which shows the change in total cost that arises when the quantity produced changes by one unit.

AVC Curve

A graph representing the Average Variable Cost of producing different quantities of output, typically showing how AVC decreases and then increases.