If you borrow $100,000 at an annual rate of 8.00% for a 10-year period and repay with 10 equal annual end-of-the-year payments of $14,902.95,then you have just repaid what type of loan?
A)Amortized loan
B)Interest-only loan
C)Discount loan
D)Compound loan

Question

Quizplus · Accepted Answer

An amortized loan is a loan that is repaid in equal installments over a specific period of time, with each payment consisting of both principal and interest. Since the payments in this scenario are equal and consistent, it fits the definition of an amortized loan. Option B, an interest-only loan, would not require equal payments of principal and interest, and options C and D do not accurately describe the characteristics of the loan in question.

If You Borrow $100,000 at an Annual Rate of 8