Finance
Amortization of a mortgage loan means:
AThe interest rate decreases each year
BScheduled periodic payments reduce the loan principal over the loan term✓ Correct
CThe loan balance remains constant while only interest is paid
DThe loan may be called due at the lender's discretion
Explanation
An amortized loan has payments structured so that each payment covers interest due plus a portion of principal. Over time, the principal balance is fully reduced to zero by the final payment.
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