Eric blank 1 (An Installment) or (a single-payment)

Eric blank 2 (wanted to avoid making a lump sum repayment) or (only needed interim financing)

Kenji blank 1 (An Installment) or (a single-payment)

Kenji blank 2 (He can slowly but surely pay off the loan) or (he doesn't want to keep track of multiple payments)

Sharon blank 1 (variable-rate) or (fixed rate)

Sharon blank 2 (were not subject to change) or (were subject to change)

Van blank 1 (variable-rate) or (fixed rate)

Van blank 2 (The long term probably assured a variable rate) or (interest rates were holding steady)

3. Characteristics of single-payment or installment loans andfixed- or variable-rate loans Single-Payment versus Installment Loans, and Fixed-Rate versus Variable-Rate Loans Payments on consumer loans are described by the terms of the loan. When the loan is paid is one factor. An installment loan is paid either periodically over the life of the loan, usually monthly, and a single-payment loan is what the name implies: a loan whose entire balance is paid at once, usually ranging from a month to a year after the loan is made. Interest charged on the loan is another factor. Rates are either ficed or variable. A fixed rate is the same throughout the life of the loan. A variable rate may change over the life of the loan and is usually tied to current market conditions. Eric and Kenji both needed loans, but they had different reasons, personalities, and financial positions. They each had to choose between obtaining a single-payment or an installment loan. Eric Eric's uncle recently died. Eric will inherit enough money from his uncle to buy a new car. He doubts his current car will continue running much longer but he doesn't want additional debt payments right now. Eric took out a loan to pay cash for a new car today and will pay off the loan as soon as he receives his inheritance. Eric most likely took out loan because he Kenji Kenji took out a loan to buy new furniture. He has a steady job and a small savings account but didn't want to pay cash for the furniture, Kenji manages his finances so that his monthly income and expenses are consistent. He doesn't expect any financial windfalls in the near or distant future. Kenji most likely took out loan because Sharon and van both needed loans, but they had different reasons, personalities, and financial positions. They each had to choose between obtaining a fixed-rate or variable-rate loan. Sharon When Sharon took out a loan, she wanted the security of knowing what her monthly payments would be and for how long. Sharon most likely took out a loan because the monthly payment and number of payments Van Van needed a long-term loan, somewhere between 15 and 30 years. He learned that the longer the term, the fewer rate options he had. Van finally had to go with the 30-year loan. Van most likely took out a loan because