Final answer:
A loan might be repaid in equal installments over a specific period. Installment payments are used for various loan types and are constant payments made at regular intervals until the full amount, including interest, is paid off.
Step-by-step explanation:
A loan might be repaid in equal installments over a specific period. The correct answer is c) Installments. This method of loan repayment is typical for various types of loans, including personal loans, auto loans, and home mortgages. A borrower agrees to pay a fixed amount monthly or at another regular interval until the loan, along with any interest accrued, is fully paid off. This contrasts with balloon payments, which involve a large payment due at the end of the loan term, and purely interest payments where the principal balance does not decrease.
The value of a loan can be affected by various factors such as interest rates and the borrower's creditworthiness. For instance, if a borrower has been consistently late on payments, the value of the loan decreases. Conversely, if the borrower is a profitable firm, the loan is seen as more valuable. Similarly, changes in market interest rates can influence the value of a loan; if market rates have risen since the loan was made, it's less valuable, but if they've fallen, the loan is worth more.