2. A sports car, purchased for £200,000, is financed for six years at an annual rate of 6% compounded monthly. If the first payment is due in one month, the monthly payment is closest to: a. £3315 b. E3867 C. £3489 d. £3173 e. None of the above answers

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Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.