For a blended payment note with a 5% interest rate and monthly payments, use the following codes to explain how the monthly interest expense is calculated. C = cash payment E = interest expense R = reduction of principal P = principal balance

• A :

  R x 5% + C

• B :

  R x 5% x 1/12

• C :

  P x 5%

• D :

  P x 5% x 1/12