Non-performing loans are defined as loans that: a. are either in default or close to being in default and are at least 90 days in arrears. b. have been written off and loans that are at least 80 days in arrears. c. are either in default or close to being in default and are at least 60 days in arrears. d. have been written off and loans that are at least 60 days in arrears.
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- All of these have a balloon payment due at the end of the loan term EXCEPT a.a fully amortized loan. b.a term/straight loan. c.a partially amortized loan. d.an interest-only loan.Which of the following is true of a fully amortized loan? A. The amount of the payment applied to the principal remains the same during the loan period. B. Equal amounts of the payment are appiled to the principal Interest, taxes, and insurance. C. Additional payments applied to the interest during the loan period reduce the number of monthly payments required. D. Additional payments applied to the principal during the loan period reduce the number of monthly payments requiredIn the amortization of loans, interest must be paid at the beginning of each period calculated on the balance of the principal amount due (unpaid balance). TRUE OR FALSE?
- Which of the following is true when the mortgage loan is an amortizing loan? a. At the beginning of the term of the loan the largest part of the payment is a paydown of principal, but a payments progress a rising portion is applied to interest payments. b. Interest payments and paydown of principal remain constant during the loan. c. At the beginning of the term of the loan the largest part of the payment is interest, but a payments progress a rising portion is applied to the paydown of principal. d. Paydown of principal occurs at the end of the loan. e. None of the above.The loans which are to be repaid within a short period (a year or less) are referred to as: O a. Fixed liabilities O b. Long-term liabilities O c. Contingent liabilities O d. Current LiabilitiesAn important application of -Select- loans. Each loan payment consists of interest and repayment of principal. This breakdown is often developed in an amortization schedule. Interest is -Select- v in the first interest involves amortized loans. Some common types of amortized loans are automobile loans, home mortgage loans, and business period and -Select- over the life of the loan, while the principal repayment is | -Select- v in the first period and it | -Select- thereafter. Quantitative Problem: You need $11,000 to purchase a used car. Your wealthy uncle is willing to lend you the money as an amortized loan. He would like you to make annual payments for 5 years, with the first payment to be made one year from today. He requires a 8% annual return. a. What will be your annual loan payments? Do not round intermediate calculations. Round your answer to the nearest cent. $ b. How much of your first payment will be applied to interest and to principal repayment? Do not round intermediate…
- Which of the following statement is true of amortization? The computation of loan amortization is wholly based on the computation of simple interest. Amortization solely refers to the total value to be paid by the borrower at the end of maturity. The amortization schedule represents only the interest portion of the loan. The amortization schedule provides principal, interest, and unpaid principal balance for each month. In a typical loan amortization schedule: The amount of money paid towards reducing the loan balance decreases over time. The amount of interest paid each period does not remain constant. The amount of each payment does not remain constant. The amount of interest paid each period increases over time.in.......................all of the interest is paid at end of the term a)Amortized loan b)interest-only loan c)ordinary loan d)discount loanAdd-on Interest is a method of calculating the interest to be paid on a loan by combining the principal amount borrowed and the total interest due into a single figure, then multiplying that figure by the number of periods for repayment. Is it True or False?
- Identify the types of information that can readily be deter-mined from an amortization table for an installment loan. (More than one answer may be correct.)a. Interest expense on this liability for the current year. b. The present value of the future payments under chang-ing market conditions. c. The unpaid balance remaining after each payment.d. The portion of the unpaid balance that is a currentliability.7. Time Value of Money: Amortized Loans An important application of -Select- interest involves amortized loans. Some common types of amortized loans are automobile loans, home mortgage loans, and business loans. Each loan payment consists of interest and repayment of principal. This breakdown is often developed in an amortization schedule. Interest is -Select- in the first period and -Select- over the life of the loan, while the principal repayment is -Select- in the first period and it -Select- thereafter. Quantitative Problem: You need $15,000 to purchase a used car. Your wealthy uncle is willing to lend you the money as an amortized loan. He would like you to make annual payments for 5 years, with the first payment to be made one year from today. He requires a 6% annual return. a. What will be your annual loan payments? Do not round intermediate calculations. Round your answer to the nearest cent. $ b. How much of your first payment will be applied to interest and to principal…Simple interest refers to interest on a loan computed as a percentage of the loan amount. Compound interest refers to the process of, investing your money. saving your money. C a loan amortization. a loan computed at a nominal interest rate. E earning interest on interest.