Finance
An amortized loan in Michigan is one in which:
AInterest is paid only at closing
BEach payment reduces the principal balance, with the ratio of principal to interest changing over time✓ Correct
CThe entire principal is paid in one balloon payment
DMonthly payments decrease over time
Explanation
Amortization is the process of gradually paying off a loan through regular installment payments. Each payment includes both principal and interest; early payments are mostly interest, while later payments are mostly principal.
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