All-in-One Exam Prep Platform

What does the term "amortization" refer to in loan payments?

قرض کی ادائیگی میں اصطلاح "امورٹائزیشن" سے کیا مراد ہے؟

Accumulating interest on the principal amount
Calculating simple interest
Paying off debt with a fixed repayment schedule in regular installments
Calculating compound interest

Answer: Paying off debt with a fixed repayment schedule in regular installments

Explanation

Amortization refers to the process of gradually reducing a debt through regular loan payments.

It allocating a portion of each payment to interest and the remaining amount to the principal, until the loan is fully repaid.

Install this app on your device for quick access right from your home screen.