Finance
A negative amortization loan in New Mexico is one in which:
AThe loan balance decreases faster than scheduled
BThe loan balance increases because payments are insufficient to cover accruing interest✓ Correct
CThe interest rate decreases over time
DThe loan is paid off ahead of schedule
Explanation
Negative amortization occurs when minimum payments are less than the accruing interest, causing the unpaid interest to be added to the loan balance—increasing the amount owed rather than decreasing it.
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