Which financial term describes a loan used for funding that is expected to be paid back over time?

Which financial term describes a loan used for funding that is expected to be paid back over time?

• A. Grant
• B. Loan
• C. Investment
• D. Subsidy

Answer: (B)

The term that describes a loan used for funding, expected to be paid back over time, is indeed a loan. A loan is a financial arrangement where one party borrows money from another with the agreement to repay it, typically with interest, over a specified period. This process involves a contractual obligation to return the borrowed funds, which distinguishes it from other financial terms. Grants represent funds provided that do not need to be repaid, making them suitable for different purposes than loans. Investments usually refer to the allocation of resources, often financial, to generate future returns, differing from the direct borrowing process of a loan. Subsidies are financial support from governments or organizations aimed at encouraging certain activities or lowering costs, rather than involving repayment. Thus, a loan is the most appropriate term for funding that necessitates repayment over time.

The term that describes a loan used for funding, expected to be paid back over time, is indeed a loan. A loan is a financial arrangement where one party borrows money from another with the agreement to repay it, typically with interest, over a specified period. This process involves a contractual obligation to return the borrowed funds, which distinguishes it from other financial terms.

Grants represent funds provided that do not need to be repaid, making them suitable for different purposes than loans. Investments usually refer to the allocation of resources, often financial, to generate future returns, differing from the direct borrowing process of a loan. Subsidies are financial support from governments or organizations aimed at encouraging certain activities or lowering costs, rather than involving repayment. Thus, a loan is the most appropriate term for funding that necessitates repayment over time.