Which of the Following Statements Regarding Loan Maturity Is True

question 64

Multiple Choice

Which of the following statements regarding loan maturity is true?

• A) The longer the loan maturity, the higher the amount of interest paid.
• B) The shorter the loan maturity, the higher the total cost of borrowing.
• C) The longer the loan maturity, the higher the monthly payments.
• D) The shorter the loan maturity, the lower the monthly payments.
• E) The longer the loan maturity, the lower the total cost of borrowing.

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Definitions:

Annual Period

The annual period is a 12-month timeframe used in financial reporting, planning, and evaluation of a company's performance.