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Binder and Sons borrowed $138,000 for three years from their local bank and now they are paying monthly payments that include both principal and interest. Paying off debt by making installments payments, such as Binder and Sons is doing, is referred to as:___________

Respuesta :

Samawati

Answer:

B. amortizing the debt.

Explanation:

Amortization is the process of decreasing the net value of a loan through periodic repayment of part principal and interest over time.  Monthly repayment of loans and mortgages are the most common form of debt amortization.

Amortization is also known as installment payments. A fully amortized debt have equal monthly repayments. The amortization schedule helps a borrower track the progress of his loan repayment. The term amortization also refers to the process of spreading the cost of intangible assets throughout their estimated useful lives.

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