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29 January, 22:23

What is true about the payments with closed-end credit?

a. They increase over time.

b. The decrease over time.

c. They remain the same until the credit is paid off.

d. They vary from month to month.

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Answers (1)
  1. 29 January, 22:53
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    C) They remain the same until the credit is paid off.

    Explanation:

    In a closed-end credit, borrower and lender agree on principal amount, interest rate and monthly payments. These features stay the same over time.

    The most common types of closed-end credit are mortgages and car loans.

    For example, if a person wants to buy a car on credit, they agree to pay a monthly amount, that includes both interest and principal payments, until the full amount is paid off in a specified date in the future. After the last payment, the right to ownership of the car is transferred from the borrower to the lender, closing the credit.
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