What type of loan makes interest payments throughout the life of the loan and then pays the principal and final interest payment at the maturity date?
A)Amortized loan
B)Interest-only loan
C)Discount loan
D)Compound loan

Question

Quizplus · Accepted Answer

This type of loan is an interest-only loan, which means that the borrower is only required to make interest payments throughout the life of the loan. The principal and final interest payment is then due at the maturity date. Amortized loans involve making regular payments that include principal and interest, while discount loans involve receiving a lump sum upfront that is less than the face value of the loan. Compound loans involve accruing interest on the principal balance, which can result in higher interest costs over time.

What Type of Loan Makes Interest Payments Throughout the Life