Payments on an installment obligation typically include the payment of
A)principal only.
B)both principal and interest.
C)interest only.
D)interest, but only if collateral is involved.

Question

Quizplus · Accepted Answer

Installment obligations are loans that are repaid over time with regular monthly payments. These payments typically include both principal and interest. The principal is the amount borrowed, and the interest is the cost of borrowing the money. Therefore, borrowers on an installment obligation are making payments towards both the amount borrowed (principal) and the cost of borrowing (interest).

Payments on an Installment Obligation Typically Include the Payment of