Finance
The process of gradually reducing a loan balance through regular principal and interest payments is called:
ADepreciation
BAmortization✓ Correct
CCapitalization
DAcceleration
Explanation
Amortization is the process of paying off a debt in regular installments over time, with each payment covering interest and a portion of principal so the loan is fully paid by the end of the term.
Related Arkansas Finance Questions
- A borrower's credit score is used by lenders primarily to:
- An adjustable-rate mortgage (ARM) differs from a fixed-rate mortgage in that the ARM's:
- A reverse mortgage is designed for homeowners who:
- A conventional mortgage loan is one that:
- The Ability-to-Repay (ATR) rule requires lenders to:
- Section 32 mortgage loans (High-Cost Mortgages under HOEPA) are restricted because they:
- A wraparound mortgage is one where:
- Freddie Mac (FHLMC) was originally created to:
Practice More Arkansas Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Arkansas Quiz →