Types of Credit UPDATED ACTUAL Questions and
CORRECT Answers
A mortgage in which the initial interest rate is normally fixed for a
Adjustable-Rate Mortgage
specified period of time after which it is reset periodically, often
(ARM)
every month
A type of loan where you borrow money from your retirement
401(k) Loan savings account. You must pay that borrowed money back, plus
interest, within 5 years of taking your loan, in most cases.
The paying off of debt over time in equal installments; part of
Amortization each payment goes toward the loan principal while the other
part goes toward interest
CORRECT Answers
A mortgage in which the initial interest rate is normally fixed for a
Adjustable-Rate Mortgage
specified period of time after which it is reset periodically, often
(ARM)
every month
A type of loan where you borrow money from your retirement
401(k) Loan savings account. You must pay that borrowed money back, plus
interest, within 5 years of taking your loan, in most cases.
The paying off of debt over time in equal installments; part of
Amortization each payment goes toward the loan principal while the other
part goes toward interest
