Question

Some banks offer variable rate loans with defined periods. For example, a variable rate loan might start at 3% and have the rate guaranteed not to increase for five years. This could be a rational loan option for a person if he or she

Answer 1

The answer is: plans to pay off the loan entirely within five years

Having guarantee like this would make it much easier for the debtors to formulate their financial planning so they can afford to pay their loan within the range of their convenience.

With an interest rate that guaranteed to not change like this, the creditors do not have to worry on the market condition for the next five years since it wouldn't affect the amount that they had to pay.

Answer 2

Is C because i just did the test and was correct! i hope it helped.