Question

What is the first step when solving present or loan amortization using a formula? a. decide what the monthly payment will be c. determine the periods in the problem, which is the number of periods per year b. apply the present amortization formula to determine the balance d. determine the interest rate in the problem

Answer 1

The answer is not B.

I took the quiz on Edge and put B and got it wrong

Answer 2

C: determine the periods in the problem, which is the number of periods per year.

Explanation:

Amortization of loan has scheduled periodic payments for both principal and interest. Here, the borrower first pays off the interest expense for the period, and then the remaining principal.

Therefore, the first step when solving present or loan amortization using a formula will be - determine the periods in the problem, which is the number of periods per year.