A loan that is repaid in equal payments over a specified time period is called a (n)
A) discount loan
B) balloon loan
C) amortized loan
D) none of the above

Question

Quizplus · Accepted Answer

An amortized loan is a loan that requires equal payments over a specified time period, with each payment consisting of a portion of the loan principal and interest. This ensures that the loan is fully paid off by the end of the specified time period. A discount loan involves the borrower receiving less than the face value of the loan upfront, and repaying the full value at a later date. A balloon loan involves making low payments for a period of time, with a large payment (the "balloon payment") due at the end. Therefore, the best choice is C.

A Loan That Is Repaid in Equal Payments Over a Specified