Which of the following most accurately describes the way that reductions in principal balance on a fixed$-$rate mortgage change the interest expense and reduction of principal amounts on that mortgage? Assume a fixed installment payment.

Select answer from the options below

Reductions in principal result in higher interest expense payments and higher reduction of principal payments.

Reductions in principal result in lower interest expense payments and higher reduction of principal payments.

Reductions in principal result in lower interest expense payments and lower reduction of principal payments.

Reductions in principal result in higher interest expense payments and lower reduction of principal payments.