A loan that is repaid on monthly, quarterly and annual basis in equal payments is classified as____________?
Correct answer: A. Amortized loan
- A. Amortized loan
- B. Depreciated loan
- C. Appreciated loan
- D. Repaid payments
Explanation
An amortized loan is repaid through regular installments that include both interest and a gradual reduction of principal. Depreciation applies to asset cost allocation, not loan repayment.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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