On March 2, Conroy and Conrad Inc.obtained a loan for $120,000 for 5 years at 7%.Payments are $2,000.What type of loan is this considered to be?
A) fixed principal payments
B) blended principal payments
C) floating principal payments
D) prime principal payments

Question

On March 2, Conroy and Conrad Inc.obtained a loan for $120,000 for 5 years at 7%.Payments are $2,000.What type of loan is this considered to be? 
A) fixed principal payments
B) blended principal payments
C) floating principal payments
D) prime principal payments

Quizplus · Accepted Answer

This is a blended principal payment loan because the loan payments include both principal and interest, and the amount of principal paid each month increases over time while the interest paid decreases.