1) Which of the following statements is true of amortization?

A) With an amortized loan, a periodic payment of principal portion gradually decreases over a period.

B) With an amortized loan, a larger proportion of each month's payment goes toward interest in the early periods.

C) The computation of loan amortization is wholly based on the computation of simple interest.

D) Amortization schedule represents only the interest portion of the loan

2)

Which of the following statements is true about the effective annual rate (EAR)?

A) The EAR is the interest rate actually paid (or earned) after accounting for compounding.

B) The effective annual interest rate (EAR) is defined as the annual growth rates that do not take compounding into account.

C) The EAR is the annualized interest rate using simple interest. It ignores the interest earned on interest associated with compounding periods of less than one year.

D) The EAR is the simple interest charged per period multiplied by the number of periods per year