Which of the following best describes a loan where the firm must pay interest on the loan and pay back the principal in one lump sum at the end of the loan?

Question

Quizplus · Accepted Answer

A single, end-of-period payment loan is also known as a balloon payment loan or bullet loan, and typically requires the borrower to make regular interest payments but pay back the principal in a lump sum at the end of the loan term. This type of loan is often used for short-term financing, such as bridge financing or construction loans. The other options, promissory note, bridge loan, and committed line of credit, do not necessarily require a lump sum payment at the end of the loan term.

Which of the Following Best Describes a Loan Where the Firm