Answer :
The correct answer is B. amortization.
Here's an explanation:
1. Amortization is the process of paying off a loan over time through regular payments that cover both the principal (the original amount borrowed) and the interest (the cost of borrowing the money).
2. When you make monthly mortgage payments, for example, a portion of the payment goes towards reducing the principal amount of the loan, while the rest covers the interest charges.
3. Over time, as you continue to make these payments, the balance of the principal decreases, and the loan gets closer to being fully paid off.
Therefore, in the context of the question, the process of paying off the principal on a loan is referred to as amortization.
Here's an explanation:
1. Amortization is the process of paying off a loan over time through regular payments that cover both the principal (the original amount borrowed) and the interest (the cost of borrowing the money).
2. When you make monthly mortgage payments, for example, a portion of the payment goes towards reducing the principal amount of the loan, while the rest covers the interest charges.
3. Over time, as you continue to make these payments, the balance of the principal decreases, and the loan gets closer to being fully paid off.
Therefore, in the context of the question, the process of paying off the principal on a loan is referred to as amortization.
