I’ve seen math formulas that breakdown how much of the pricipal amount and how much of interest makes up the repayment at each point. Why is it relevant what the breakup is like as long as you’re getting the money back?
Why is it considered safer? Are amortised debt instruments always better than ones that offer lumpsum repayment at the end of term?
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From the viewpoint of a lender amortising debt is preferable as you reduce your risk to the counterparty Over a time frame as opposed to a bullet repayment… let’s say you give a loan to a friend – would you prefer he repay you monthly or right at the end!
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