An amortized or installment loan represents an annuity whose cash flows consist of the loan payments.

Name: An amortized or installment loan represents an annuity whose cash flows consist of the loan payments.
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An amortized or installment loan is designed such that the borrower makes regular, equal payments over a set period of time, with each payment consisting of both principal and interest. This creates a stream of cash flows that is essentially an annuity.

An Amortized or Installment Loan Represents an Annuity Whose Cash