Amortized loans must have which one of these characteristics over its life? Group of answer choices Equal interest payments Declining periodic payments One lump-sum principal payment Increasing payments Either equal or unequal principal payments

Question

Matthias

Business

1 November, 01:53

Amortized loans must have which one of these characteristics over its life? Group of answer choices Equal interest payments Declining periodic payments One lump-sum principal payment Increasing payments Either equal or unequal principal payments

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Answers (1)

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Higgins · Answer 1

The correct answer is: Either equal or unequal principal payments.

Explanation:

An amortized loan is the loan that is paid off through regular periodic payments. Amortization is the process of spreading out the loan over a period. Examples of amortized loans are home loans, car loans, etc.

The principal amount is paid in payments that can be equal for each period or unequal for each period. The interest is paid off first then the excess amount reduces the principal. Id the payments are regular for each period it is called fully amortized loan.