Which of the following best describes how interest is calculated on loans, when payments are due, and any associated fees or conditions?
a) Interest is calculated using a fixed rate applied to the principal amount annually, payments are due at the end of each year, and there are no additional fees or conditions unless payments are late.
b) Interest is calculated using compound interest, where the rate applies to both the principal and accumulated interest. Payments are typically due monthly, and late payments may incur additional fees. Some loans have conditions such as prepayment penalties.
c) Interest is calculated once at the beginning of the loan period based on a predetermined rate, payments are due only at the end of the loan term, and there are significant fees for early repayment.
d) Interest rates vary daily based on market conditions, payments are due weekly, and borrowers must provide collateral for all types of loans to avoid additional fees.
