In an amortization schedule of monthly mortgage payments with a fixed interest rate, over time the fraction of each monthly payment that reflects interest _ and the fraction of the payment that reflects principal ____

Finance Dec 24, 2020

In an amortization schedule of monthly mortgage payments with a fixed interest rate, over time the fraction of each monthly payment that reflects interest _________ and the fraction of the payment that reflects principal ____________.

A) Increases, decreases

B) Decreases, increases

C) Decreases, decreases

D) Remains unchanged, decreases

E) Decreases, remains unchanged

Expert Solution

rate positively .

correct answer is option B) Decreases, increases

With monthly fixed payment intially interest will be high but over time principal amount increases more than interest amount. Answer is option B)

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