M4 MONEY Borrowed: L5 COST OF DEBT

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Last updated 9:48 PM on 7/29/26
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8 Terms

1
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Which determines the total cost of a loan?

d. All of the above

2
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The amount of time you have to pay back a loan is called:

a. Loan term

3
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Paying off a loan early:

c. Can save you money

4
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Principal is the amount it costs you to borrow money.

False

5
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Interest rates are determined by the level of risk a lender is taking. The higher the risk, the higher the interest rate.

True

6
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Lenders look at your credit score, credit history and income to determine your interest rate.

True

7
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For every payment you make on a loan, a portion is applied to interest and a portion is applied to principal.

True

8
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The interest payment is what actually works to reduce the total balance you originally borrowed.

False