Discuss why more interest is paid on a loan at the beginning of the loan term than at the end of the term?

Answer 1

I will make it simple
you borrow 1200$ and pay 100$ + Interest every month

at the end of the first month you owe 1200$ + interest on 1200$
at the end of the Eleventh month you owe 200$ + interest on 200$
The principle is this case goes down 100$/month and the interest is based on the amount owing at time of payment

So in this case interest amount gets lower as you go along paying the principal installments

It is the same if your payment 0f $100/month including the interest amount, it is just harder to calculate for me each month.

Answer 2

Amortization.

interest owed off a $100,000 loan will be less then a loan thats been paid down to $50, 000, or $10,000, or $100

Answer 3

It depends on the loan, bank loan, auto loan, home loan must places want there money back as fast as they can receive it back in interest first.

Answer 4

The higher the balance of the loan (the more you owe) the more interest you pay.