Which of the Following Are TRUE of Fixed Payment Loans

question 63

Multiple Choice

Which of the following are TRUE of fixed payment loans?

• A)The borrower repays both the principal and interest at the maturity date.
• B)Installment loans and mortgages are frequently of the fixed payment type.
• C)The borrower pays interest periodically and the principal at the maturity date.
• D)Commercial loans to businesses are often of this type.

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Definitions:

Composite Unit

A measurement or quantity combining two or more units to represent a product or system's multiple aspects.

Contribution Margin

The difference between the sales revenue and variable costs of a product, indicating how much contributes to covering fixed costs and earning profit.

Contribution Margin

The residual amount from sales income following the deduction of variable expenses, allocated for covering fixed costs and producing profit.

Variable Costs

Expenses that vary in relation to the amount of production or business activity.