7. when loans are amortized, monthly payments are ______, while the amount of your monthly payment applied…

7. when loans are amortized, monthly payments are ______, while the amount of your monthly payment applied to interest ______ and the amount of your monthly payment applied to the principal ______ over time.\n\nconstant, increases, increases\n\nconstant, decreases, increases\n\nvariable, decreases, increases\n\nvariable, decreases, decreases

7. when loans are amortized, monthly payments are ______, while the amount of your monthly payment applied to interest ______ and the amount of your monthly payment applied to the principal ______ over time.\n\nconstant, increases, increases\n\nconstant, decreases, increases\n\nvariable, decreases, increases\n\nvariable, decreases, decreases

Answer

Brief Explanations:

When loans are amortized, the monthly payment amount is set to pay off the loan over a fixed - term with a fixed interest rate, so it is constant. As the principal balance of the loan decreases over time, the interest portion of the payment (calculated as a percentage of the remaining principal) decreases. Since the total payment is constant and the interest portion is decreasing, the amount applied to the principal increases.

Answer:

B. Constant, Decreases, Increases