A loan agreement that requires the firm to pay interest on the loan and pay back the principal in one lump sum at the end of the loan is called:

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A single, end-of-period-payment loan is also known as a balloon loan. This type of loan requires the borrower to make regular interest payments, but the principal is not amortized. Instead, the borrower must pay back the entire principal in one lump sum (the balloon payment) at the end of the loan term. Balloon loans are often used for short-term financing or as bridge loans.

A Loan Agreement That Requires the Firm to Pay Interest