Question

At the start of an amortized loan, the bulk of your monthly payment goes towards the _________. On the other hand, as you get closer to the end of the loan term, the bulk of your monthly payment goes towards the __________.

Answer 1

At the start of an amortized loan, the bulk of your monthly payment goes towards the interest. As you make payments and reduce the loan balance, the amount of interest you need to pay decreases, and the bulk of your monthly payment goes towards the principal.

Step-by-step explanation:

At the start of an amortized loan, the bulk of your monthly payment goes towards the interest. This is because interest is calculated based on the outstanding loan balance. As you make payments and reduce the loan balance, the amount of interest you need to pay decreases, and the bulk of your monthly payment goes towards the principal.