A fully amortized 30-year loan would have payments based on _____ months and the loan is due in ______ months.

A fully amortized 30-year loan would have payments based on _____ months and the loan is due in ______ months.

• A. 240 / 240
• B. 360 / 360
• C. 180 / 180
• D. 300 / 300

Answer: (B)

A fully amortized 30-year loan involves a repayment period structured over a total of 360 months. This duration reflects the standard length of a 30-year mortgage, allowing for a consistent monthly payment that covers both principal and interest over the life of the loan. The loan is indeed due in 360 months as well, meaning that borrowers will make these payments for the entirety of those 30 years. In this scenario, each monthly payment is calculated to ensure that by the end of the loan term, the entire amount borrowed (plus interest) is fully paid off. The other options reflect different loan terms that do not align with the standard 30-year mortgage. For instance, 240 months represents a 20-year loan, 180 months corresponds to a 15-year loan, and 300 months would suggest a 25-year loan, none of which meet the criteria for a fully amortized 30-year loan.

A fully amortized 30-year loan involves a repayment period structured over a total of 360 months. This duration reflects the standard length of a 30-year mortgage, allowing for a consistent monthly payment that covers both principal and interest over the life of the loan.

The loan is indeed due in 360 months as well, meaning that borrowers will make these payments for the entirety of those 30 years. In this scenario, each monthly payment is calculated to ensure that by the end of the loan term, the entire amount borrowed (plus interest) is fully paid off.

The other options reflect different loan terms that do not align with the standard 30-year mortgage. For instance, 240 months represents a 20-year loan, 180 months corresponds to a 15-year loan, and 300 months would suggest a 25-year loan, none of which meet the criteria for a fully amortized 30-year loan.