Reference no: EM131306443
1. Which of the following statements is true of loan amortization?
A.With an amortized loan, a bigger proportion of each month's payment goes toward interest in the early periods.
B.With an amortized loan, a bigger proportion of each month's payment goes toward interest in the later periods.
C.With an amortized loan, a smaller proportion of each month's payment goes toward interest in the early periods.
D.With an amortized loan, the interest portion of each month’s payment remains unchanged.
2. What is the appropriate interest rate to use when making interest rate comparisons if there is more than one compounding period per year?
A. The effective annual interest rate (EAR)
B. The annual percentage rate (APR)
C. The quoted interest rate
D. The simple interest rate
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