Respuesta :
The interest charges are calculated on installment loans, that is by using the original balance, and these charges are then added to the loan. It is an add-on method. Hence, Option B is correct.
What is an installment loan?
There are various types of loans and installment loan is one of them. The basic difference between an installment loan and a personal loan is that when a person takes an installment loan, they have to pay it off in regular intervals and that is over time. On the other hand, a personal loan is an example of an installment loan.
In simple words, when there is an agreement or kind of contract that is signed by the borrower in which the condition of repaying the amount of loan is stated as such that the amount will be repaid over time with a set number of scheduled payments. These numbers depend upon the amount that has been taken for a loan.
Thus, Option B is correct.
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