As a fixed-payment loan runs on, the interest portion inside each paym…

Question

As a fixed-payment loan runs on, the interest portion inside each payment:

Accepted Answer

C. Falls

1. Interest is charged on the balance still outstanding.
2. That balance shrinks with every payment made.
3. So the interest portion falls while the principal portion grows.
_Source: OpenStax Principles of Finance 2e, Chapter 8, Time Value of Money II._

Answer

Holds

Answer

Jumps

Answer

Rises

As a fixed-payment loan runs on, the interest portion inside each payment:

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