When a Loan Is Amortized, a Relatively High Percentage of the Payment

question 124

True/False

When a loan is amortized, a relatively high percentage of the payment goes to reduce the outstanding principal in the early years, and the principal repayment's percentage declines in the loan's later years.

---

Definitions:

Interference

A cognitive theory that proposes that people forget information because other information learned either before or after interferes with its retrieval.

Retroactive Interference

The phenomenon where newly acquired information interferes with the recall of previously learned information.

Proactive Interference

The phenomenon in which older memories interfere with the recall of newer memories.

Proactive Inhibition

A decrease in learning efficiency or memory performance due to interference from previous or old information that affects the acquisition of new information.