Which of the Following Characteristics Applies to the Amortization of a Loan

question 51

Multiple Choice

Which of the following characteristics applies to the amortization of a loan such as a home mortgage?

• A) The amortization decreases with each payment.
• B) The amortization increases with each payment.
• C) The amortization is constant throughout the loan.
• D) The amortization fluctuates monthly with changes in interest rates.

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Definitions:

Return on Investment

A financial metric used to calculate the profitability of an investment, measuring the gain or loss generated on an investment relative to the amount of money invested.

Investment Opportunity

A chance to use money with the expectation of achieving a return greater than the initial outlay.

Required Rate of Return

The minimum expected rate of return on an investment that makes it acceptable to an investor, based on the investment's risk level.

Housekeeping Department

A division within a business, particularly in the hospitality industry, responsible for maintaining cleanliness, order, and hygiene in rooms and public areas.