Amortization Tables Are Useful for Each of the Following Reasons

question 26

Multiple Choice

Amortization tables are useful for each of the following reasons EXCEPT ________.

• A)determining the principal balance due if the loan is being paid off early
• B)determining how much of a total payment is interest and how much is principal for tax purposes
• C)determining the regular periodic total payment
• D)All of these are useful purposes of an amortization table.

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Definitions:

Investment Project

An undertaking requiring capital investments with the aim of generating future returns.

Interest Rate

is the percentage of a loan amount charged by the lender to the borrower for the use of assets.

Net Present Value

A calculation that compares the present value of a project's cash inflows to its cash outflows, used to assess the viability or profitability of an investment.

Interest Rate

The percentage of a loan that incurs interest costs for the borrower, often stated as an annual rate of the outstanding loan amount.