An amortized loan: repays both the principal and the interest in one lump sum at the end of the loan term. requires the principal amount to be repaid in even increments over the life of the loan. requires that all payments be equal in amount and include both principal and interest. requires that all interest be repaid on a monthly basis while the principal is repaid at the end of the loan term. may have equal or increasing amounts applied to the principal from each loan payment.
An amortized loan: repays both the principal and the interest in one lump sum at the end of the loan term. requires the principal amount to be repaid in even increments over the life of the loan. requires that all payments be equal in amount and include both principal and interest. requires that all interest be repaid on a monthly basis while the principal is repaid at the end of the loan term. may have equal or increasing amounts applied to the principal from each loan payment.
Chapter4: Time Value Of Money
Section4.17: Amortized Loans
Problem 1ST
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Question
An amortized loan:
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repays both the principal and the interest in one lump sum at the end of the loan term. |
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requires the principal amount to be repaid in even increments over the life of the loan. |
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requires that all payments be equal in amount and include both principal and interest. |
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requires that all interest be repaid on a monthly basis while the principal is repaid at the end of the loan term. |
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may have equal or increasing amounts applied to the principal from each loan payment. |
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