Question

Why do customers save money if they pay off a closed ended loan faster than the amortization tablerequires?
(1 point)
Customers can renegotiate the terms of the loan any time.
It does not since the terms of the loan are defined in the table.
Paying more of the principal reduces the amount of interest due.
A closed ended loan has standard payments that include the principal.
A)
Why is it important that businesses provide an amortization table for any large loan?
(1 point)
It includes every possible expense associated with a loan.
The business can use it to adjust the payments if necessary.
Large loans have very different legal requirements than small loans.
It includes much of the information lenders are legally obligated to provid

Answer 1

1) Paying more of the principal reduces the amount of interest due.
- Interest accrues on the outstanding principal, so early or larger principal payments lower the balance and therefore the total interest paid.

2) It includes much of the information lenders are legally obligated to provide.
- Amortization tables disclose payment-by-payment principal and interest breakdowns and total finance charges, information lenders are required to give borrowers (e.g., under TILA/consumer disclosure rules).