Finance
An amortized loan is one in which each payment covers:
AInterest only, with principal due at the end
BBoth interest and principal, gradually reducing the loan balance✓ Correct
CPrincipal only for the first 5 years
DVarying amounts depending on the borrower's income
Explanation
A fully amortized loan has scheduled payments that include both interest and principal, so the loan balance is gradually reduced to zero by the final payment.
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