Finance
Which of the following best describes negative amortization?
APaying extra principal each month to reduce the loan balance faster
BWhen monthly payments are insufficient to cover interest, causing the loan balance to increase✓ Correct
CA loan with a negative interest rate
DDeclining property values over time
Explanation
Negative amortization occurs when the monthly payment is less than the interest due, causing the unpaid interest to be added to the loan balance, which grows over time.
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