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16 February, 11:53

Jeff just financed a used car through his credit union. His loan requires payments of $275 a month for five years. Assuming that all payments are paid on time, his last payment will pay off the loan in full. What type of loan does Bill have?

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  1. 16 February, 11:58
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    Amortizing loan.

    Explanation:

    Amortizing loan is the type where the principal and interest are paid in equal amounts till the loan is fully paid.

    Usually payments are represented in an amortizing schedule. The payments are made up of part of the principal and the other part the interest paid together.

    Jeff's loan of $275 monthly payments for 5 years is a form of amortizing loan.
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