Early on in an amortized loan the interest portion of each payment is typically than the principle portion. Towards the end of the loan term the interest portion of each payment is typically than the principle portion. This is because the principle remaining over the life of the loan. A) less / greater / increases B) greater / less / increases C) greater / less / decreases D) less / greater / decreases

C

Explanation:

An amortized loan is a form of loan which the principle together with the accrued interest component is gradually written off over an agreed period of time at a specified rate.An equal amount is regularly paid over the extended period.

The interest component of an amortized loan is firstly settled before considering the principle amount , which makes the interest component to be higher that the principle at the initial stages. This process leads to a reduction in the volume of the principle balance with time . Moreover , as the principle reduces with time , the interest expenses also reduces , and it eventually gets to a point where the principle component of repayment becomes greater.

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