As the Number of Monthly Payments on a Loan Increases

question 17

Multiple Choice

As the number of monthly payments on a loan increases, the size of each payment [blank] and the total interest paid over the life of the loan [blank].

• A)increases, decreases
• B)decreases, stays the same
• C)stays the same, decreases
• D)decreases, increases

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Definitions:

Unsold Units

Inventory items that were not sold during a specific period and are carried over to the next period.

Operating Efficiency

A measure of how well a company uses its resources to produce outputs, often assessed by comparing inputs to outputs in production processes.

Absorption Costing

An accounting method that includes all manufacturing costs, direct and indirect, in the cost of a product.

Operating Income

The profit realized from a business's core operations, excluding deductions of interest and tax as well as income from non-operating activities.