Which of the following are true of fixed payment loans?
A) The borrower repays both the principal and interest at the maturity date.
B) Installment loans and mortgages are frequently of the fixed payment type.
C) The borrower pays interest periodically and the principal at the maturity date.
D) Commercial loans to businesses are often of this type.

Question

Quizplus · Accepted Answer

Fixed payment loans require the borrower to make the same payment amount throughout the loan term. This payment includes both principal and interest. Installment loans and mortgages are frequently structured as fixed payment loans. The borrower does not have to pay off the entire principal balance at the maturity date as they will have been making payments towards it throughout the loan term.

Which of the Following Are True of Fixed Payment Loans