Answer:
B: down payment
Step-by-step explanation:
An increase in the down payment decreases the amount of money that has to be paid over time.
The monthly payment decrease with the increase in down payment of the loan amount. Option B is correct.
Monthly payment is the payment which has to paid against the loan amount or the borrowed money calculated with interest rate.
The monthly payment is the amount which is required to pay each month to pay off the borrowed principal amount.
It can be calculated with the following formula.
[tex]M=P\left(\dfrac{r}{1-(1+r)^{-nt}}\right)[/tex]
Here, (P) is the principal amount, (r) is the interest rate and (t) is time.
The monthly payment is inversely proportional to the down payment. When the money paid as down payment is more, then the monthly payment of loan is less.
Thus, the monthly payment decrease with the increase in down payment of the loan amount. Option B is correct.
Learn more about the monthly payment here;
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