Misconception · MIS:equal-payment-means-equal-principal

Mistaken idea “Equal payment means equal principal”

Mistaken reasoning: This mistake divides an installment note's principal evenly instead of applying interest to opening carrying amount.

Updated Aug 21, 2026 Review due Nov 8, 2026

Why this is mistaken

Compute interest first from opening carrying amount. The remaining cash reduces principal.

Where to watch

When this mistake may appear

  • Contractual payments are level.
Check your work

Your work may contain this mistake if:

  • Each payment reduces principal by the same amount.