A home mortgage that can be repaid over a 30-year period is an example of:A.a student loan.B.a line of credit.C.a long-term loan.D.a short-term loan.
Question
A home mortgage that can be repaid over a 30-year period is an example of:
A. a student loan.
B. a line of credit.
C. a long-term loan.
D. a short-term loan.
Solution
To determine the correct answer to the question regarding a home mortgage that can be repaid over a 30-year period, let's analyze the options provided:
- A. a student loan: This typically pertains to loans borrowed to pay for educational expenses. While these can also be long-term, they are not directly relevant to home mortgages.
- B. a line of credit: This is a flexible loan option that allows borrowers to draw on their available credit as needed, usually shorter in duration than a mortgage.
- C. a long-term loan: Mortgages are classified as long-term loans because they usually have repayment periods that extend over many years, commonly 15 to 30 years.
- D. a short-term loan: This contrasts with long-term loans; short-term loans are paid back over a shorter period, generally under five years.
Conclusion:
Based on the definitions and classifications of each option, the correct answer is C. a long-term loan. A home mortgage for a 30-year period is indeed categorized as a long-term loan due to its extended repayment duration.
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