Concerning a fully amortized loan, it is correct to say that it is a loan characterized by: level payments with equal portions applied to interest and principal. level payments that cover all interest charged and reduce the principal to zero by maturity. payments of varying amounts necessary to cover interest and reduce principal to zero by maturity. level payments that first pay all interest owed over the term of the loan then pay off principal.

The correct answer is statement two which says that the amortized loans are those loans which have level payments that cover all interest charged and reduce the principal to zero by maturity.

Explanation:

Amortization can be defined as the process of paying off a loan by making regular payments in installments over a period of time.

Amortized loans are of two types, fully amortized and partially amortized.

In case of fully amortized loans, the payments are made according to the amortization schedule so that by the end of the set term, the loan is fully paid.

month 1 start amount =$3287.90 interest=(3287.90x0.0145/12)3.97 total to pay=$3291.81 paid =$1200 balance =$2,091.87

month 2 starting amount= $2,091.87 interest =$25.28 total to pay =$2117.15 paid =$1200 balance $917.15

month 3 starting amount =$917.15 interest =$11.08 total to pay =$928.23 paid =$928.23 balance =$0 total to pay 1200+1200+928.23 = $3328.23 it will take 3 months to pay a total of $3328.23