A single-payment loan is advantageous only if
A)the interest rate is less than on an installment loan.
B)funds will be available to repay the lump sum.
C)figured with the discount method.
D)figured with the simple interest method.
E)it is unsecured.

Question

Quizplus · Accepted Answer

A single-payment loan requires the borrower to repay the entire lump sum (principal + interest) in one payment. This can be advantageous if the borrower has access to the funds needed to make the payment when it is due. If the borrower does not have the funds available, they may have to take out another loan to repay the first one, which can lead to a cycle of debt. Therefore, choice B is the best option as it considers the borrower's ability to repay the loan.

A Single-Payment Loan Is Advantageous Only If