Shameika Olson owns a bookstore and has arranged a business loan with the bank where she has her business account.The terms of the loan allow her to borrow up to $12,000 within the next year.She must pay interest only on the unpaid loan balance.Olson has arranged which of the following?
A) a line of credit
B) a secured loan
C) a collateralized loan
D) a mortgage loan

Question

Quizplus · Accepted Answer

A line of credit allows the borrower to borrow funds up to a certain limit and only pay interest on the amount borrowed. This matches the terms described in the scenario. A secured loan would require collateral, which is not mentioned. A collateralized loan is similar to a secured loan and would also require collateral. A mortgage loan is specifically for real estate purchases and is not relevant in this scenario.

Shameika Olson Owns a Bookstore and Has Arranged a Business