What typically happens to the amount of interest paid over the life of an amortized loan?

The correct choice illustrates the nature of amortized loans, where the structure of payments is designed to change over time. In an amortized loan, borrowers make regular payments that include both principal and interest. Early in the loan term, a larger portion of each payment goes toward interest, and as the loan matures, the amount allocated to interest decreases while the amount going toward the principal repayment increases.

This pattern occurs because the interest is calculated on the remaining principal balance. As the principal balance decreases with each payment, the interest charged in subsequent payments also decreases. Therefore, over the life of the loan, borrowers pay less in interest as they pay down the original loan amount, leading to an increasing portion of their payments being directed towards repaying the principal.

The other options suggest that the interest either remains constant, increases, or is eliminated, which does not align with the typical behavior of amortized loans. The structured decrease in interest payments directly correlates to the gradual reduction in the principal balance, emphasizing the nature of amortization in loan repayment.