Question

With a(n) _______, the full amount of the loan is received when the contract is signed, but only the interest is paid over the life of the loan. The principal is then paid on the date that the loan is due. Question 14 options: retirement loan balloon loan line of credit installment loan

Answer 1

Balloon loan

Step-by-step explanation:

Balloon loan is a type of a relatively short term loan common in the commercial lending where only a portion of the principal amount , the interest is amortized over that period and the total outstanding amount , the principal is the final payment at the end of the loan period.

This makes the final payment to be significantly high compared to the other payments made over the entire loan period , hence the name balloon (inflated ) name given to it.