A loan that requires the borrower to make the same payment every period until the maturity date is called a
A) simple loan.
B) fixed-payment loan.
C) discount loan.
D) same-payment loan.
E) none of the above.

Question

Quizplus · Accepted Answer

A fixed-payment loan requires the borrower to make equal payments at regular intervals until the loan reaches maturity. This is different from a simple loan, which requires the borrower to pay back the entire principal plus interest in one lump sum at the end of the loan term. A discount loan requires the borrower to pay back the full amount of the loan plus interest at maturity, but the interest is deducted upfront at the time the loan is made. A same-payment loan is not a commonly used financial term, so it is not a valid choice. Therefore, the best choice is B, fixed-payment loan.

A Loan That Requires the Borrower to Make the Same