ECONOMICS
MONEY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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May be
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Never
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Detailed explanation-1: -Typically, the majority of each payment at the beginning of the loan term pays for interest and a smaller amount pays down the principal balance. Assuming regular payments, more of each following payment pays down your principal. This reduction of debt over time is amortization.
Detailed explanation-2: -The loan principal is the amount you borrow and goes down as you begin to pay it back, while interest is the cost of borrowing the money.
Detailed explanation-3: -Many lenders offer the option to put money toward your principal. Select that option and specify your amount and date. Phone payments: You can call your lender to make an additional payment toward your principal.
Detailed explanation-4: -An amortized loan is a type of loan that requires the borrower to make scheduled, periodic payments that are applied to both the principal and interest.