Finance
In mortgage lending, what does 'amortization' mean?
AThe process of increasing the loan balance over time
BThe gradual repayment of a loan through scheduled principal and interest payments✓ Correct
CThe refinancing of a mortgage at a lower rate
DThe calculation of prepayment penalties
Explanation
Amortization is the process by which a loan is gradually paid off through regular payments of principal and interest over the loan term, until the balance reaches zero.
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