Final answer:
Loan amortization with changing annual payments is a more representative financial model that incorporates different annual payments over different periods.
Step-by-step explanation:
Loan amortization with changing annual payments is a more representative financial model that incorporates different annual payments over different periods.
When annual payments are not fixed, the loan amortization schedule adjusts to reflect the changing payments. This can be useful in scenarios such as when a borrower expects an increase in income over time and plans to make larger payments in the future.
By incorporating changing annual payments, the loan amortization model provides a more accurate representation of the financial dynamics, allowing borrowers to better manage their loans and forecast the impact of different payment schedules.