Amortized Loan: Paying Back a Fixed Amount Periodically
Deferred Payment Loan: Paying Back a Lump Sum Due at Maturity
|Amount Due at Loan Maturity:||$|
Bond: Paying Back a Predetermined Amount Due at Loan Maturity
|Amount Received When the Loan Starts:||$|
A loan is a contract between a borrower and a lender in which the borrower needs to repay the lender a sum of money loaned part by part over time in order to clear the debt.
There are three types of loans: 1. Amortized: pay back a fixed amount 2. Deferred: pay back a lump sum at the end of the loan term 3. Bond: pay back a predetermined lump sum at the end of the loan term