Question6 A credit foncier loan has: periodic interest payments with a service fee payable at inception periodic interest and principal repayments when cash flows from a project begins to appear periodic interest payments and principal repaid at maturity periodic interest and principal repayments when the company decides to repay periodic equal repayments of interest and principal throughout the term ResetMaximum marks: 1 Flag question undefined

Question

BlackTom AI · Accepted Answer

First, we reiterate the question to set the context: a credit foncier loan has which payment structure?
Option 1: 'periodic interest payments with a service fee payable at inception' — This describes a loan with ongoing interest plus an upfront fee, but it does not match standard amortization patterns where principal is paid during the term.
Option 2: 'periodic interest and principal repayments when cash flows from a project begins to appear' — This would imply payments start only when project cash flows start, which is characteristic of some project-finance arrangements with grace periods, not a typical credit foncier loan.
Option 3: 'periodic interest payments and principal repaid at maturity' — This is a bullet-point form of a bullet-in-time loan (balloon at end) rather than periodic amortization; many loans do amortize earlier, so this is not the common structure for a credit foncier.
Option 4: 'periodic interest and principal repayments when the company decides to repay' — This suggests discretionary repayment timing, which is not standard for formal loan covenants; repayment timing is usually predetermined.
Option 5: 'periodic equal repayments of interest and principal throughout the term' — This describes levelized, regular amortization where each period you pay both interest on the outstanding balance and a portion of principal, resulting in equal total payments over the term. This is the typical structure for many secured or mortgage-like facilities issued by a credit foncier, aligning cash flows from the debt with constant amortization.
Looking at the patterns, options 1–4 describe fringe or nonstandard/unclear timelines or payment triggers, whereas option 5 aligns with the conventional instrument: periodic equal repayments of both interest and principal across the term. The idea of constant amortization ensures the loan is paid down steadily and the cash flow is predictable for both borrower and lender.
Therefore, option 5 provides the standard amortizing schedule for a credit foncier loan, whereas the other choices imply upfront, contingent, or discretionary payment features that are inconsistent with the typical loan structure described. The reasoning hinges on understanding amortization schedules and the distinction between interest-only, balloon, discretionary, and level-payment loans.

View Explanation

Log in for full answers

Similar Questions

In implementing a credit card payment program, assuming to stop using credit, your debt balance will decrease slowly at first and more quickly as time progresses.

You bought a new car today which cost you $20,000. You financed the entire cost with a 5-year loan at 4.00%. If you make payments at the end of each month starting a month from now, how much is your monthly payment?

You plan to apply for a $50,000 loan. The APR is 5.5% compounded quarterly. If you plan to make payments of $2,000 per quarter, how many years do you need to pay off the loan?

Question at position 21 One of the main distinctions between a construction loan and permanent financing is that a construction loan payment is “Interest Only” and permanent financing is “Amortizing”, meaning the principal is paid down over the life of the loan?TrueFalse

Elena is looking to buy a car for $10,000. She is planning to buy this car by borrowing 60% of the car price. The bank is happy to do the loan for 3 years at a rate of 7.67% per year. Calculate the monthly car loan repayment In your answer, ignore the "$" and enter with 2 decimal places

Question at position 25 At the end of a fully amortized loan, there is a final balloon payment to the lender.TrueFalse

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler